Tag Archives: MySpace

MySpace vs. Facebook

25 Thursday Oct 2007

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The buzz continues with Facebook picking up another half a billion dollars today at a $15B valuation, or an amazing ~100 times estimated revenue.

MySpace is trying to defend it’s territory, and in raw numbers it’s still kicking Facebook’s butt. Here’s some interesting data touting MySpace’s might.

It’s astounding really.  It’s easy to jump in and gripe about how ridiculous the valuation is but it’s not totally out of the realm of possibility.  But clearly, Facebook would have to be beyond Google-ish in it’s growth to make it reasonable.

I think an early Internet growth company should get a valuation of somewhere around 20-30 times revenue, and a mature company should get somewhere around 10 times revenue.  Even Google, who is still growing like gangbusters, is incredibly sexy, and swathed in hype, is only worth 14 times revenue.

Facebook is early enough and is growing fast enough that it’s revenue should be growing at more than 100% per year.  At 100%/year, for two years, they would be at ~$600M/year.  Then, they’d have to stay at the 70-80%/year growth rate that Google has to warrant the 14 times revenue number.  And that’s just to justify $15B; by the end of two years, I assume MS and the other investors are hoping it’s worth $30B.

Can they do it?  That’s going to be really, really hard.

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Google’s failure to diversify

01 Saturday Jul 2006

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Really interesting read on Business Week on Google’s hype but lack of actual market delivery on many of its products beyond its flagship Search.

The stats cited (assuming they’re accurate) are really eye-opening:

Google Talk, an instant-messaging service launched last August, now ranks No. 10, garnering just 2% of the number of users for market leader MSN Messenger, according to comScore Media Metrix. Three-month-old Google Finance, heralded as a competitor to market leader Yahoo! Finance, has settled in as the 40th-most-visited finance site, according to data from Hitwise, a competitive intelligence firm. Gmail, the e-mail service that was lauded at its 2004 launch for offering 500 times as much storage space as some rivals (they quickly closed the gap), today is the system of choice for only about one-quarter the number of people who use MSN and Yahoo e-mail…

…Take Orkut, Google’s two-year-old social-networking site. Since making an initial splash, Orkut has seen limited changes and has faded in popularity everywhere except Brazil. Today it draws less than 1% as much U.S. traffic as MySpace.

The article does admit that there are some great successes to tout, like Google Maps. But in general, despite some really fancy technology and cool features, they can’t reach the marketshare they want.

Clearly, Google is still a successful company and every company out there would love the level of press coverage (read: hype) and batting average that Google has (Homestead included). But I think the facts show what many of us already believed: while it is a great technology company and great recruiting company, it’s currently only a decent product company and a worse product marketing company. Oh, and they’re run by engineers.

As Don Dodge writes, their products’ success “depends on how much effort Google puts into making them better, and how much real value they deliver to users”.

Also, given the unbelievably favorable opinion that the blogosphere (and Internet industry in general) has of Google and everything it touches, the fact that most of their launches haven’t gotten much traction reminds us of something else. It reminds us that most of the world doesn’t listen to us.

Update: The discussion continues: Michael Parekh focuses on how Google and the others can better market these hyped products.

Mugshot, from Red Hat

01 Thursday Jun 2006

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Wow, everyone's jumping on the bandwagon.

First, sorry to all (heh) my readers. I've been gone for the past month and work was really wicked busy for the weeks preceding my break as I was preparing for the break. Homestead gives you a paid sabbatical every 5 years and I just took my second one. It was fantabulistic!

Anyway, Red Hat launched Mugshot.org, yet another social network.  Wow, how many can there be?  The buzz around is that Red Hat is more interested in getting an open source social network out there, as opposed to building a destination themselves.  Maybe that's true; in a strange way, that makes way more sense to me.

You gotta go faster, baby

18 Saturday Mar 2006

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Interesting article on why your website has to change, and when you’re done, has to change again. Often times, it’s too easy to think of websites as software, when frankly, it’s not. More often then not, websites are marketing. And marketing has to change and adapt to the needs, wants, and fantasies of your customer.

At Homestead, we try to push the envelope of this everyday. We want to move faster, while actually releasing stable, usable, well-written and well-designed software. Luckily, we are in a segment of the industry that isn’t as capricious as social networking, where the high-fructose-corn-syrup-powered whims of teens controls your fate. Our customers are a little more discerning and a little more consistent in their needs.

But, as we all know, only the paranoid survive and the paranoia just pushes you to move faster and faster.