Is Plaxo Worth $3,810,000,000
Posted by Jeff as web 2.0
Only if you take Facebooks recent fundraising that valued that company at $15 billion at face value (no pun intended). The FB transaction valued each of the company’s 59 million users at $254, which when applied to Plaxo’s reported 15 million users nets the $3.8 billion valuation. So what is interesting about Plaxo reportedly hoping to fetch $100 million is that this valuation implies each user is worth $6.66 (hmmm 666…), which when applied to Facebook suggests not a valuation of $15b but rather $400 million.
Obviously, this kind of speculative math is just that for two reasons, a Plaxo transaction has not been completed and valuation is a lot more complicated than simply looking at how many users a company has. Also taken into account would be how much time they spend on the site, competitive dynamics, cash flow, headcount, new user acquisition costs, and who the users actually are… among a thousand other things. But it’s a fun little exercise to do.
Plaxo, an early social networking site that helps people keep their address books updated, is up for auction, people briefed on the offering said Wednesday night. The company, which has not made a profit, is seeking as much as $100 million, these people said.