Today's purchase of Bebo by AOL for $850m is bound to focus attention on Facebook's supposed $15bn valuation.
That puts a value on each Facebook user of around $300, whilst Bebo is only bringing in $20 per user.
Even allowing for the younger crowd on Bebo, the disparity does look pretty large. Especially when you consider that Bebo has been behind a lot of really interesting innovation in the space, like Open Media, Kate Modern and the imminent Endemol tie-in, Gap Year.
The $15bn valuation of Facebook is based largely on Microsoft's purchase last year of 1.6% of Facebook for $240m. But that deal was a lot about ensuring that Microsoft could broke ad-space on Facebook - and of course, that it could keep Google out of the party.
There's was a brilliantly cynical comment on the Fake Steve Jobs blog last year, which perhaps held a germ of truth:
Picture this: Zuckerberg's got a big fish on the line for real money at a $15 Bill valuation. But is having trouble landing it. So he calls up his buddy at MS (formerly of Groove Networks) and his other contacts from working with MS so far on selling ads. They work out a deal where they get to say publicly that MS has dropped $240 Mill for 1.6%. What isn't so public is that a lot of it works out to funny-money; MS product, MS services contracts, consulting fees, etc. And a good deal of the real cash MS looks to get back with side contracts for future purchases from MS. So the real money spent is much smaller but Facebook still gets real investment because MS is just a ringer in the crowd to suck in the real marks. And MS gets their hedge on Facebook at a discount by trading on their name. Plus MS gets sales to Facebook on the books to add a little juice to their earnings number.
Anyway, good luck to AOL. Whilst all the attention seems to be on the Microsoft-Yahoo bid, AOL seem to be making some smart buys recently.
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