Facebook and Social Services Value
January 6, 2011
BusinessWeek is raining on the Facebook / Goldman Sachs’ parade. My view is that whatever Goldman Sachs does is about money. Some folks forget that in my opinion. “Facebook at $50 Billion Looks More Like Tencent Than Google” is a pretty clever write up. First, the title makes the casual reader think of a cheapo metaphor. Tencent is a company, but I am not sure how many folks in Harrod’s Creek know that. Second, BusinessWeek thinks that the $50 billion valuation and the general hoo-hah about the Facebook / Goldman Sachs “deal” is “Buzz, Bloom, Hype.”
I don’t want to hop on the bandwagon. The more I think about deal, the more I think that the two best friends are taking steps to make sure that there is a big pay day. In addition, I think the BusinessWeek story and the other write ups are unlikely to do much more than fan the flames of excitement over Facebook.
The economic climate still troubles me. Bank types need deals. Facebook needs to keep rolling and grabbing mind share. I am not sure Facebook can pull off a deal with China. Russia already seems to be slipping away.
Get the money while the getting is good. The tactics unfolding now are tailored to the present economic climate. I am not sure there is much more to the valuations, the chatter, or the tie up beyond money. I will know if I am right or wrong soon enough.
The Facebook / Goldman Sachs’ affair may end up benefiting other social network services. Compared to the so so news from the consumer electronics show, at least the Facebook / Goldman Sachs’ tie up is interesting.
Stephen E Arnold, January 6, 2011
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