While not a soothsayer nor particularly adept at calling the top tick, the bevy of articles highlighting the vast amounts of VC funding and forecasts for the social media space are causing some concern?
The recent Business Week (from Oct 22, 2007) story titled “What in the Web are they thinking” got me to thinking about the topic (yet again). With Facebook expected to go public or be acquired at values superceding $10 BILLION (what?!), profit expectations (not revenue) quoted at $2.2 billion (what?) for the company by one investor quoted…i think they bring in $150m in revenue now from a deal with msn…makes me think we are at the top of the market!????
While I still cringe at not having bought GOOG with the stock shooting past $600 like it was a minor speedbump, recent write down by Ebay also caught my eye. I understand “the street” had already written down the Skype acquisition…but only 24 months earlier, this was the darling of all darling acquisitions. Now, when ebay writes down $1.4b, the stock slights edges up?
At CES last year in Las Vegas, a VC on one of the investor panels suggested funding goes in 3 year cycles for the internet space? At the time, we were in “year two” according to the VC…specifically for the social networking space. I have a Facebook profile, I set up a Myspace account, I use LinkedIn once in a while…whats next? Am I representative of the internet user base writ large? Or, are there millions of users still clamoring for a social networking profile and about to jump on Facebook en masse? Or, consolidation engineered by the investment banking community? Aggregation (ie LinkedIn is acquired by a Monster or Career Builder) or more money thrown at the space..ie funding apps?