I'm worth $1m, how 'bout you? Valuing web's latest thang

On the eve of Forbes' declaration that Faceback founder Mark Zuckerberg is worth $2 billion, investigative industry rag Silicon Alley Insider ponders whether MySpace is "now worthless" and whether it was even worth buying on the part of Rupert Murdoch. (He paid $580 million for it, which at the time was considered a steal. But that was back when people used the site ....for actual social networking rather than just to look up bands).

How quickly the tide comes in, and goes back out, in the internet world.

Let's consider the valuation of some of web's social networking trends, shall we? It's a fun game which a lot of industry sources like to play at - with no accepted formula and no right answer.

*Facebook - the social networking giant has been popular for awhile now, yet advertising revenues are still abysmal - the last valuation was published in May 2009 at $10 billion

*Twitter - arguably the web's latest 'thing' - currently valued at $1 billion - but no one knows if that figure is anywhere even close to accurate, since the company doesn't make any money and has no business model

*MySpace - currently valued at $500 million to $1.2 billion

*Friendster - remember them? they lost all their business to Facebook yet claim to have a handful of fans left in Asia - currently valued at $210 million

Again there is no right answer in this game, and perhaps this is what makes it so fun to watch. The only accepted truth is that once the site becomes unpopular, the valuation dips. Oftentimes this has no relation to the actual revenue the company is making. If only businesses in other sectors were valued on these vague, cloudy formulas! Just imagine a world where your bank was valued based on 'hype' and 'promise'!

Suggested reading: Ray Valdes at Gartner has posted an interesting and more educated viewpoint on how valuations happen and what they imply.

Letter to Facebook: have you lost your mind?

Dear Facebook,

I used to be a big fan, but my love affair is waning very fast. I sheepishly admit that in the early days, I may have even called you 'FaceHook' on occasion. But now, things have changed fast, and I worry you've lost your mind. And here's why:

1. You aren't Twitter. Some say you are trying to Tweet-ify your homepage and jump on the microblogging bandwagon. Note: that's what your newsfeed, which you've unceremoniously killed, used to achieve. This new mishmash of updates/wall conversations/posts is ugly and disorganised. I long for the old newsfeed.

2. There is already a Twitter, and it's doing just fine thanks, given its growth statistics.

3. You used to be an experience site where one could store little pieces of life and show them around to ones' friends. Now, I can't even find pictures, groups, others' profiles or the other little things that made my experience better. Now, you just seem to be a weird cross between an RSS reader, microblogging and mess.

4. "New Facebook" amplifies your worst feature - the one your biggest fans hate - applications that do nonsense things like vampire fighting that annoy and take up space on one's computer.

And here's why I fear losing your mind could result in your death:

1. I no longer recommend that people in my mom & dad's generation will 'get you' and benefit from joining. My mom would have been just about OK on the old Facebook, but the new one? She won't be able to make heads or tails of it. She shops online, so I believe her computer skills are average or above average for the 60-70 years segment. Wasn't that your biggest growth segment previously? You've screwed that one up royally.

2. I will no longer put my pictures on your site and chose Flikr from now on. Once people stop posting their photo albums, you're not even living up to your name "Facebook" anymore.

3. Your users revolted about the new T&C's to the point where you had to retract them. You planted the seed of doubt in users' minds that you are about to infringe on their rights and privacy (bringing me to my next point....)

4. You have apparently been emailing people's non-member friends that they recommend they join. (This happened to me, despite me a. not saying that was OK with me and b. not even wanting the recommendation passed on.) If you carry on infringing on people's online rights, your users will desert you faster than Friendster.

Please, Mark Zuckerberg, I implore you to rethink this strategy. It ain't working, and 94% of your userbase agrees, from the recent vote. If you wanted to create a new service, you should have kept the happy Facebook bubble, named the new thing something else and given users the choice to upgrade, have both, or stay happily where they were.

Sincerely,
Emily