Website Inflation?

Something weird has been going on with the Internet…

Just 3 years ago, Myspace was bought out for only $580 million dollars yet they had 200 million members.

Then a year later, YouTube gets bought out for a massive $1.65 billion dollars by Google.

And now, rumors has it that Facebook is valued at $15 billion dollars. But it only has 70 million members – three times less members than MySpace yet worth 25 times more.

Now let’s do some maths…

Myspace – $580 million dollars for 200 million members =  $2.9 per member

Facebook – $15 billion dollars  for 70 million members = $214 per member

That’s a 7300% inflation rate in just the past three years!

OK, maybe I’m exaggerating a bit since at the time Myspace was bought out, it did not have 200 million members. But still, there’s clearly a big inflation going on with the value of internet start-up companies. Doesn’t this remind you of the 1999/2000 dot-com crash? Remember how advertisement rates, especially for banner ads, soared crazily high to as much as $100 per 1000 impressions? And now, it’s only $0.01 per 1000 impressions?

Is this a sign of a dot-com crash? What is your view?

Anyways, I’ll say for NewsCorp (the company which bought out MySpace), a 7300% return on investment in just three years is not bad

[tags]internet marketing, internet start-up, myspace, facebook, youtube, newscorp, dot-com crash[/tags]