61–70 of 100 posts
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It's not just you. I was about to post this. On a related note, 11K per user is insane. What did Yahoo see in Broadcast.com?
Mark Cuban
PayPal was a steal.
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Cat gifs are pretty universal. But seriously: I've had people on conference calls when they couldn't understand the language, but someone wanted them to see slides. The fact they could join the call (in that case on Skype) definitely made the network more valuable. You might argue that the fact you can't speak to some of them drops the value per user, and that is true to some extent. But the fact they are on there an…
Orders of magnitude. Sure, adding someone else in china is in theory worth something. However adding one more friend that I regularly communicate with on a network is worth more to me than every person in China. PS: For large networks X Log X is probably much closer to reality than X ^2. Just compare the amount of internet bandwidth between NY to California vs the bandwidth between the US and China.
Metcalf's law is not suggesting "The value of the network to any random node within the network." Because that measure is very subjective in the ways you say.
Instead, it's "The total value of the network to all nodes". Because the more people in the network, the higher the probability that the nodes you DO care about are also connected.
I do not like charts like this because their existence implies that cost per user somehow matters, or is a deciding factor even, in the price of an acquisition. Even if that was the major metric in determining a price, there's often a very large difference between the number of users currently and the expected number 1 year or 5 years out. You don't buy a company because of the number of users it has right now. You b…
- When investing in or acquiring companies, people may use this metric in addition to price/sales or in rare cases for tech companies price/EBITDA valuation multiples. It forms the basis for comps analysis which bankers, M&A types and VCs do all the time.
- Companies use the ratio in similar ways when fundraising or talking to acquirers. "Based on how many users we have and comparable transactions, we're worth $X million"
- While you may buy users looking forward, you also may look at how you can "monetize" existing users, i.e., if we can get $X per existing user, that would be worth Y.
It is of course not the only metric that an acquirer evaluates (at least the good ones), but they do look at it as do investors, bankers and startups. So good or bad, it is here to stay.
All this shows to me is how useless it is to compare by "cost per user". The note at the bottom says "Facebook acquired WhatsApp for 16 billion dollars, the largest startup acquisition to date. Cost per user was comparable to Google's YouTube acquisition." . It's sort of close, but we're still talking about a swing of >30% there -- $5 billion dollars in WhatsApp's case. There are many things missing from "cost per us…
Oh my god... I'd forgotten completely about YouTube. At under $2B, that must have been one of the best acquisitions of the whole bunch. YouTube for 1/10 the cost of WhatsApp.
I do not like charts like this because their existence implies that cost per user somehow matters, or is a deciding factor even, in the price of an acquisition. Even if that was the major metric in determining a price, there's often a very large difference between the number of users currently and the expected number 1 year or 5 years out. You don't buy a company because of the number of users it has right now. You b…
Fair point, but like it or not, cost per user matters. - When investing in or acquiring companies, people may use this metric in addition to price/sales or in rare cases for tech companies price/EBITDA valuation multiples. It forms the basis for comps analysis which bankers, M&A types and VCs do all the time. - Companies use the ratio in similar ways when fundraising or talking to acquirers. "Based on how many users…
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Oh my god... I'd forgotten completely about YouTube. At under $2B, that must have been one of the best acquisitions of the whole bunch. YouTube for 1/10 the cost of WhatsApp.
Best acquisition? When was the last time you gave Youtube money (or Google money to watch videos)? The fact that their videos are no unwatchable because of quality stutters and the inability to rewind/jump, it's only a matter of time for a new video site to take over.
When was the last time you paid Google for search results? Meh, can't be making that much money.
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Best acquisition? When was the last time you gave Youtube money (or Google money to watch videos)? The fact that their videos are no unwatchable because of quality stutters and the inability to rewind/jump, it's only a matter of time for a new video site to take over.
It's your right to complain about Youtube quality these days (from what I understand ISPs tend to throttle them mercilessly), but it was clearly an extremely good buy for Google, and Google makes tons of money off of Youtube ads. When was the last time you paid Google for search results? Meh, can't be making that much money.
Nice way to show I was wrong :)