Goldman Sachs and Digital Sky Technologies handed Facebook’s, Mark Zuckerberg, $500 million behind closed doors last week, propelling the social media site to a value of $50 billion, give or take a couple of zeros, depending on which side of the bubble you’re located.
If you’re sitting snug in the middle, you’re probably praying the sock puppet from Bar None (better known for Pets.com) doesn’t make an appearance anytime soon. If you are on the outside, you might be recognizing the so-called value of such a media site is highly dependent on delivering the goods (advertising revenue), and I’m not talking about the virtual stuff found on Farmville.
Social media sites are a great tool, but unless you have a product, you’re just throwing a keg party for the elite. Then after they’re done drinking all the beer, eating all the nachos, and putting out their cigarettes on the lawn furniture, the last ones stuck with the check, will be the neighbors (secondary market traders) who conveniently arrive just as the police were getting there.
We have Twitter valued at a reported $4 billion, LinkedIn at $2.2 billion, and Groupon recently rejected a $6 billion takeover bid from Google, so you know they’re not ready to move back in their parent’s basement just yet. Even so, what should this be saying to us?
It means Hannibal Lecter is giving out free, all-you-can eat passes at the local Golden Corral, and the meatloaf tastes a little funny.
Should we call off the dinner party or wait for desert?
(Photo via Pets.com)