I hate it when someone else beats me to a post, but no sense crying about it. Besides, David Kirkpatrick sums up the situation far more eloquently than I ever could:
"All those people on the blogs and in the press who are obsessed over Facebook's valuation are really a bore. Anybody who thinks Microsoft's $15 billion valuation ever was a real common-stock valuation doesn't understand much about finance. And nobody but Microsoft would have wanted to lead a round at that valuation--getting into Facebook had unique value for the company which most of all wants to prevent Google from making further inroads into its business."
"It may still prove to have been a brilliant stroke for Microsoft--the software giant is in the door with search on Facebook just when Facebook is the platform where more and more of the Internet's content is being created. There's a special characteristic to all that data--it is not searchable by Google. A nice score for Microsoft for a mere $240 million. Who cares how much of FB it got in return? It kept Google out."
Kirkpatrick, who is working on a book about Facebook, maintains a must-read blog about the company on--where else?--Facebook. (Talk about eating your own dog food!) He makes the correct point that when Facebook closed its deal with Microsoft back in fall 2007, that still was during the bull market's heyday. So when you wake up, check the news aggregators and find yet more mindless musing over the "news" that Facebook--or any other tech company for that matter--is worth a lot less in February 2009, you have to wonder whether these folks have been paying attention.
Still, the fascination remains for the chattering classes. When the conversation turns to Facebook (and Twitter, as well,) the bloviation-fest is nonstop. Especially regarding possible investments from venture firms.
It's easy to understand the valuation obsession. It's another holdover from a recent past that now seems forever ago. You remember those days, back when the economy was working? Back when the blogosphere was perpetually fascinated by widgets and irrelevant Web site tweaks? But I'm with Kirkpatrick on this one. It's boring beyond description. No matter. As the recession-depression rips through the economy, there's important news to consider.