Facebook's $15 Billion Valuation
Well it seems that Facebook wrangled a $15 billion valuation from Microsoft (and possibly some other hedge funds). The question on many people's minds is "Are they really worth that?" After all look at ebay and the $3 billion purchase (approx.) of Skype. They're not looking so bad right now. In my opinion, the cost is irrelevant. The price has been set; no sense looking backward now.
The real issue is that Google dropped the ball in the social networking space. If they moved quickly (back when the MySpace acquisition was all the news), they could have prevented a Facebook from ever happening. Now, Facebook's got a load of cash in the tank. With that kind of reserve, they can survive any tactics Google throws at them and continue to build their business model. Unless a radical change happens in this area, Google will have 2 big competitors in this space for quite a while.
When I look at how slow Google has been in this area, I think that they must have another goal outside of the consumer social network. They had to know this was a threat. There was never a serious marketing push behind Orkut. Maybe they thought that with their advertising deal with MySpace that they did not need to build a competitor, but I don't believe that. I wonder if Google is willing to concede the consumer space to MySpace and Facebook and its real target is the business space. It makes sense on some level. They are building their office applications and host email in their enterprise services. What if they build a social network for businesses? I've been in companies with only 20 people where I really did not know the skills and goals of some of my colleagues. What better way to connect an organization than with a social network. From inside the network they get access to those free Google office app's? More on this later.
