Tuesday, September 25, 2007

Social Networks Grow

Social network sites are clearly the in thing and are developing in many ways. Today we read that News Corporation is set to launch a mobile phone version of MySpace. The service will be advert supported free and enable users to transfer messages, comments and update blogs.

Separately, in that other social world of Facebook we hear of potential investors ready to table $300 to $500milion for just 5% of the company! That will give the company a valuation of potentially around $10 billion! Last September, Yahoo offered $900 million in order to acquire Facebook. An offer rejected by Mark Zuckerberg,(pictured) its 23-year-old chief executive Zuckerburg. Today Facebook has more than 40 million members, up from 9 million last year.

This time the investors are no other than Microsoft and Google. Facebook’s valuation could go even higher if the two rivals create a competitive bidding war. It is also rumoured that Facebook is seeking a minimum valuation of $10 billion but it go as high as $13 billion. Not bad for a company which Richard Greenfield, a Pali Research analyst, earlier this year, estimated generated revenues between $60 million to $96 million, with no real profit. Much of that revenue comes from a year-old advertising relationship with Microsoft.