valuation

Facebook valuation 'shocker' another reason to be skeptical of media hype

Here's a message for all the tech bloggers and reporters freaking out over the alleged Associated Press bombshell that some copy-paste legerdemain led to the revelation that Facebook valued itself at $3.7 billion at the time of the ConnectU vs. Facebook court settlement:

Please, chill out! This is not news!

While it had not yet been reported that the ConnectU settlement was a reported $65 million (though since it was in cash and stock, that value may have dropped with the onset of the recession), the $3.7 billion Facebook valuation has been around since July.

The New … Read more

VCs throw cold water on portfolio companies

One after another, venture capitalists are stating the obvious to the companies they've invested in: Now would be a very good time to keep your money under lock and key.

From Sequoia Capital, which has had parts of its dire economic presentation to its portfolio companies aired out in the press, as reported in VentureBeat and GigaOm, to angel investor Ron Conway in his letter to his portfolio companies, the message is clear and persistent: prepare for the worst.

And that preparation, as Conway noted in his letter to portfolio companies, includes cutting marketing costs, general and administrative expenses … Read more

Microsoft's Facebook stake influenced ConnectU case

UPDATE:To include mention of a report that Facebook valued itself at $3.75 billion.

SAN JOSE, Calif.--What is Facebook really worth?

One of the burning questions in the technology business during the past year also played a major role in the dispute between social networks ConnectU and Facebook, according to documents obtained by CNET News.com.

Some interesting details about Facebook's valuation were revealed in partially redacted court records released Wednesday by federal district judge James Ware. The documents were a transcript of a June 23 hearing in the case, which Ware had closed to the public. … Read more

What makes the most valuable tech companies so valuable?

How do we value technology companies? Ingenuity and invention, quality of service, brand loyalty, manufacturing muscle, operating efficiency, supply-chain management, price, great place to work. There are lots of metrics.

For those unfamiliar with the wily ways of Wall Street, the stock market has its own way of expressing what it thinks of companies. It's called market capitalization or market cap for short.… Read more

What is an open-source company worth? Part II (Valuing growth)

I heard from a few people about my post on the relative valuations of MySQL, JBoss, Zimbra, and XenSource. Because of a lack of data on growth trajectories, I didn't factor those into my light analysis, but anyone buying a company would seriously factor this in. In fact, as one person commented, "multiples are a factor of growth by definition of discounted cash flow based valuations."

He's absolutely right. Part of the reason that MySQL got such a great valuation is that it has significantly improved its growth in the past year. Much of this came from productizing its services (i.e., the distinction between MySQL Enterprise and Community), such that it had a compelling value proposition beyond vanilla support. Savio would be proud. :-)… Read more

MySQL, JBoss, Zimbra...What is an open-source company worth?

A friend and I were talking about the relative valuations for open-source companies. Over on his blog, JBoss founder Marc Fleury had joked that, after seeing MySQL's valuation, he realized he clearly had "undersold."

But as it turns out, JBoss' valuation multiple was not much different from that of MySQL--which was snagged by Sun Microsystems this week for $1 billion.

The 451 Group is reporting MySQL's numbers as follows:

While MySQL has not disclosed revenue for 2007, it is believed that its revenue in 2006 was $34 million, up from $16 million in 2005 and $14 million in 2004. We estimate trailing 12-month (i.e., 2007) revenue to be about $48 million, and if we assume slightly slower growth in 2008, we get to about $65 million....Given that, it would mean Sun is paying 20.8 times trailing 12-month revenue and 15.4 times projected 2008 revenue.… Read more

Is Facebook ready to stuff its treasure chest with more booty?

Another day, another clump of Facebook financial dirt.

Kara Swisher at All Things Digital wrote early Tuesday that "according to sources," Facebook is considering the possibility of a massive new investment round. If this turns out to be true, it could lift the company's much-talked-about valuation even further into the stratosphere. Facebook's last investment round, a $25 million bounty in 2006, pushed its pre-money valuation to about $525 million. This rumored new round, which Swisher claims is "well beyond" that scope, could solidify Facebook's position in the $6 billion to $10 billion club (… Read more