I spotted the link on the BBCNews.com homepage. It was about if MySpace is going to be worth $10-20 billion in the coming few years. The debate started when RBC analyst Jordan Rohan said that MySpace could hit the $15 billion dollar mark in valuation in the next few years.
Henry Blodget in Internet Outsider writes that this could well be possible. He refutes the disagreements on the valuation that dismissed a figure like $15 billion for the world’s largest social networking site as audacious.
His arguments are the following:
• From a virtual non-existent beginning MySpace climbed to be one of the top sites in the US currently ranked at 7th position.
• It has 50 million worthy users, which is almost half that of Yahoo! already!
• Its user-base growing fantastically with almost 250,000 new signups every day.
• The $900 million deal with Google showing that revenue is starting to come in.
Henry also says that it is reasonable to believe in the theory that MySpace could be worth less than half of what Yahoo! is in a few years due to its bettered valuation. However, given the current trajectory MySpace can end up much higher!
No matter whatever bad publicity MySpace is getting these days of being a heaven for pedophiles and the volatility of the social networking ‘market’ may face in the coming days, MySpace is on the right track presently for that ‘audacious’ value.
Henry concludes by saying; The key now, for those trying to make a more refined assessment of the property’s potential value, is to follow the money - on both sides of the ledger (revenue and costs). One big search deal - and an obsession with music-related content - will not a $15 billion company make.
I completely agree with Henry here despite the fact that he tried to balance his assessments. I personally am inclined to believe that with MySpace’s current growth, it would be very hard not to agree to an ultimate valuation high of double-digit billion mark.
The best way MySpace can stay ahead from the other social networking sites such as Facebook or Bebo or Hi5 in the future is to release its API and open itself up. Then see the fun!
