Social media acquisitions have been a hot topic lately. I recently commented on the ridiculous $200 million price for Plaxo. Yesterday, various rumors circulated regarding the $1 billion acquisition of Bebo. So, in order to remain fair, I decided to do a value comparison again, this time including Bebo. First, let’s review the prices we have seen so far. Digg is asking for $300 million. Based on the Microsoft investment Facebook was valued at $15 billion. Plaxo was recently rumored at $200 million. Now we have a rumor of $1 billion for Bebo. Given that the rumors are that Google purchased Bebo, we can include Orkut in the comparison as well. Below is a pretty graph from compete.com.
Given my recent analysis of the price of a social media user at these sites, we can create the following table.
|Site||Price||Users Per Month||Price Per User|
First, a correction from a previous post about Plaxo, their user price is only $257.91. This is much more reasonable than the previous number I had, so when in doubt, assume I am an idiot. Also, given that Orkut is very close in size to Plaxo, I estimated the price based on the Plaxo price per user. As you can see from these numbers, Plaxo and Bebo are similarly priced, but I still feel it is quite expensive. My concern with the high price of the social networks is the lack of revenue streams for most of the networks besides advertisements. Until better revenue streams are created by the social networks, I think they should be considered overpriced.