VirtualWorld.ca
Surprise! Surprise!
Another hot tech company raises more money. After spurning Google's $6 Billion offer, Groupon has just raised $500 million dollars of a planned $950 million financing. With the way they're growing, I bet all kinds of VC's and angels are throwing money their way.
Much of the money raised will be used to buy back shares from existing shareholders.
I am a member of Groupon for two cities, though they haven't moved into my small town yet. They do offer some good deals and if they operate in your city you can probably save money with them. I've also seen that there are many other start-ups (like TeamBuy.ca in Canada) trying to do the same thing (offer discounts at local merchants).
Groupon has been expanding rapidly, buying up competing sites and moving into Europe and other parts of the world. I think they are in their growth stage, trying to get big fast so they have first mover advantage. I have no idea how much revenues they are making, but their model must be based on doing a large number of small transactions. Most of the deals I see involve getting $5 off a $10 price, or $10 off a $20 price. You have to do a lot of those to start making some serious money. They also don't have the same pull as Facebook or Twitter in time on site. You can spend a long time each day checking out Facebook and Twitter pages, but with Groupon you'll just log in once in a while to get a deal at the most.
I think Groupon will have to be careful, unlike other social media sites I can see people joining similar coupon type sites. There is no loyalty, people will go wherever they need to in order to get the best deal. If there are three coupon sites doing deals in my town, I'll probably join all three.
The key for Groupon will be to grow fast and establish themselves on a wide basis before their competition does. And they'll probably have to buy up more of their competition before they're done. If not, they may regret not taking the $6 Billion from Google.
Link to full article:
http://ca.finance.yahoo.com/news/Hot-shot-local-deals-site-capress-2219793103.html?x=0
Thursday, December 30, 2010
Wednesday, December 29, 2010
Is Facebook worth $56 BILLION?
VirtualWorld.ca
What is Facebook worth?
Over 500 million users and growing. Really they have no competition in their social network market. You join, your friends join, and you post your photos and links for everyone to share. You encourage your friends to join so you can keep in touch. And family members. You only need one site like Facebook, and since they've gained critical mass, it is unlikely anyone else can catch up.
The population of the Earth is over 5 billion people. 500 million people would only cover the US population and part of Europe, to put a little scope on it. I think the number of Facebook users could easily double to 1 billion, and then double from there. All these users checking in every day or so, a ready made market of people for companies to advertise to. Facebook has created a market that comes to them on a continual basis, how great is that?
The article below notes a former financial advisor, Jason Bishara, who thinks that Facebook is overvalued at $56 billion. It also states that Facebook might be holding off on an IPO because Mark Zuckerberg wants to keep more control over Facebook operations (and not have to answer to shareholders).
My opinion?
I don't know the value of Facebook, but I do know they have hundreds of millions of users and basically no competition. They are not like Apple or Microsoft. Apple makes cool products, but products that can become obsolete or that can have competition from other manufacturers. They keep having to improve and create products to drive their sales. Remember the Sony walkman? Why wasn't Sony able to stay on top of the gadget heap? Amazon is a great company but has fierce competition for selling online, and it will only increase with time.
On the other hand, Facebook is the de facto site for social networking. Once you have created an account, linked to your family and friends, posted your photos, etc., you have built an online home for yourself and you are unlikely to move. Even if you found a site you liked better than Facebook, you'd have to convince everyone else to move with you. I think Facebook has passed the point where this could happen, barring any serious blunders on their part. With personal and business online activities moving to Facebook, it just grows on itself. Facebook will continue to find ways to market to and make money from this huge mass audience. As long as Facebook remains a relevant place for people to interact socially online, it will remain the largest meeting place on earth, and the largest market of people on earth. So what kind of pricetag can you put on that?
Link to $56 Billion article:
http://ca.finance.yahoo.com/news/BUYER-BEWARE-Facebooks-56-siliconalley-3260290297.html
What is Facebook worth?
Over 500 million users and growing. Really they have no competition in their social network market. You join, your friends join, and you post your photos and links for everyone to share. You encourage your friends to join so you can keep in touch. And family members. You only need one site like Facebook, and since they've gained critical mass, it is unlikely anyone else can catch up.
The population of the Earth is over 5 billion people. 500 million people would only cover the US population and part of Europe, to put a little scope on it. I think the number of Facebook users could easily double to 1 billion, and then double from there. All these users checking in every day or so, a ready made market of people for companies to advertise to. Facebook has created a market that comes to them on a continual basis, how great is that?
The article below notes a former financial advisor, Jason Bishara, who thinks that Facebook is overvalued at $56 billion. It also states that Facebook might be holding off on an IPO because Mark Zuckerberg wants to keep more control over Facebook operations (and not have to answer to shareholders).
My opinion?
I don't know the value of Facebook, but I do know they have hundreds of millions of users and basically no competition. They are not like Apple or Microsoft. Apple makes cool products, but products that can become obsolete or that can have competition from other manufacturers. They keep having to improve and create products to drive their sales. Remember the Sony walkman? Why wasn't Sony able to stay on top of the gadget heap? Amazon is a great company but has fierce competition for selling online, and it will only increase with time.
On the other hand, Facebook is the de facto site for social networking. Once you have created an account, linked to your family and friends, posted your photos, etc., you have built an online home for yourself and you are unlikely to move. Even if you found a site you liked better than Facebook, you'd have to convince everyone else to move with you. I think Facebook has passed the point where this could happen, barring any serious blunders on their part. With personal and business online activities moving to Facebook, it just grows on itself. Facebook will continue to find ways to market to and make money from this huge mass audience. As long as Facebook remains a relevant place for people to interact socially online, it will remain the largest meeting place on earth, and the largest market of people on earth. So what kind of pricetag can you put on that?
Link to $56 Billion article:
http://ca.finance.yahoo.com/news/BUYER-BEWARE-Facebooks-56-siliconalley-3260290297.html
Wednesday, December 15, 2010
Twitter raises $200 Million in Funding
VirtualWorld.ca
Twitter has sure grown into a popular site since I first signed up for an account in the spring of 2007.
Back in 2007 you could have almost any username you wanted. Now, you have to settle for less. Twitter is so popular that it can be hard to get a decent username these days.
Most major businesses and media now advertise their Twitter page along with their Facebook page. Twitter has a long way to go before it reaches Facebook status, in members and value, but it appears to keep growing instead of leveling off in popularity.
With this new $200 million investment announced today, Twitter is now valued at $3.7 billion US. The last financing fifteen months ago valued Twitter at $1 billion US. Twitter is only about 3 years old.
The financing was led by Kleiner Perkins Caufield & Byers. Twitter also added two new members to their board, both men who are prominent in tech ventures, Mike McCue and David Rosenblatt.
The big question is when will Twitter find a way to make revenues, so that they don't have to do these financings anymore. And will a bigger company like Google or Microsoft try to buy Twitter?
http://ca.finance.yahoo.com/news/Twitter-raises-200M-investors-capress-3971891634.html?x=0
Twitter has sure grown into a popular site since I first signed up for an account in the spring of 2007.
Back in 2007 you could have almost any username you wanted. Now, you have to settle for less. Twitter is so popular that it can be hard to get a decent username these days.
Most major businesses and media now advertise their Twitter page along with their Facebook page. Twitter has a long way to go before it reaches Facebook status, in members and value, but it appears to keep growing instead of leveling off in popularity.
With this new $200 million investment announced today, Twitter is now valued at $3.7 billion US. The last financing fifteen months ago valued Twitter at $1 billion US. Twitter is only about 3 years old.
The financing was led by Kleiner Perkins Caufield & Byers. Twitter also added two new members to their board, both men who are prominent in tech ventures, Mike McCue and David Rosenblatt.
The big question is when will Twitter find a way to make revenues, so that they don't have to do these financings anymore. And will a bigger company like Google or Microsoft try to buy Twitter?
http://ca.finance.yahoo.com/news/Twitter-raises-200M-investors-capress-3971891634.html?x=0
Friday, December 10, 2010
Microsoft offered $15 billion for Facebook in 2007
VirtualWorld.ca
Interesting news today where Microsoft revealed it had made an offer in 2007 to buy Facebook for $15 billion. Hard to believe the Facebook people were able to turn this down, that is set-for-life and beyond kind of money. MZ must really enjoying building the Facebook business. Microsoft was able to buy a small stake in FB though, for a $240 million investment. Facebook search is also powered by Microsoft's BING.
If Microsoft had been able to close the deal back then, and Facebook was still the way it was today, it would be viewed as a great deal by Microsoft. Facebook is still growing and changing, so we haven't seen the end of the Facebook story yet. Rumours are they may try to do an IPO at one point, because no one seems to be able to buy them outright. Who wouldn't want to own a piece of Facebook anyway?
Click here to read full article
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Interesting news today where Microsoft revealed it had made an offer in 2007 to buy Facebook for $15 billion. Hard to believe the Facebook people were able to turn this down, that is set-for-life and beyond kind of money. MZ must really enjoying building the Facebook business. Microsoft was able to buy a small stake in FB though, for a $240 million investment. Facebook search is also powered by Microsoft's BING.
If Microsoft had been able to close the deal back then, and Facebook was still the way it was today, it would be viewed as a great deal by Microsoft. Facebook is still growing and changing, so we haven't seen the end of the Facebook story yet. Rumours are they may try to do an IPO at one point, because no one seems to be able to buy them outright. Who wouldn't want to own a piece of Facebook anyway?
Click here to read full article
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VirtualWorld.ca
Welcome to VirtualWorld.ca, where we discuss all things virtual!
Welcome to VirtualWorld.ca, where we discuss all things virtual!
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