Social Media Company Valuations and Value Drivers
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Social Media Company Valuations and Value Drivers
This is a curation site for rapidly changing social media company valuations and the various causal factors as I see them.
Curated by Tim Fernback
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Strategy Archives - HootSuite Social Media Management

Strategy Archives - HootSuite Social Media Management | Social Media Company Valuations and Value Drivers | Scoop.it
Tim Fernback's insight:

Hootsuite's value is partially based on installing useful aps to drive paid users to the company.  Here is a history of app development at Hootsuite.  Over 1M installations to date, and the growth is geometric.

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Dallas’s HipLogiq Raises $7M to Expand Twitter Marketing Software | Xconomy

Dallas’s HipLogiq Raises $7M to Expand Twitter Marketing Software | Xconomy | Social Media Company Valuations and Value Drivers | Scoop.it
Dallas’ HipLogiq announced Monday it has raised $7 million in a Series B round to expand its sales and marketing staff. Hadron Global Partners, a division
Tim Fernback's insight:

HipLogiq raises $7M in a Series B Round.  HipLogiq sells a SaaS product called SocialCompass and SocialCentriv as a reward/loyalty program for Tweets.  Location based conversations ensue.

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Mojave Networks grabs $5M for network-level mobile security

Mojave Networks grabs $5M for network-level mobile security | Social Media Company Valuations and Value Drivers | Scoop.it
Mobile device management (MDM) is not equivalent to mobile security. That's the message we heard this morning during our discussion with Garrett Larsson, the cofounder and CEO of Mojave Networks (f...
Tim Fernback's insight:

Sequia Capital and Bessemer Ventures (both previous investors) lead the round for $5M into Mojave (a 2011 startup - mobile device management company).  Mojave is compared to Onavo (Isreali startup) that Facebook bought for  an estimated $150-200M earlier.

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Gnip CEO Chris Moody talks Twitter and mining social data (video) | C R U C E S

Gnip CEO Chris Moody talks Twitter and mining social data (video) | C R U C E S | Social Media Company Valuations and Value Drivers | Scoop.it
CEO of Gnip, @chrismoodycom recently spoke to Bloomberg about social data and what businesses are currently looking for. Enjoy!
Tim Fernback's insight:

GNIP is one of Twitter's earliest strategic partners, and they analyze social data and resell the analysis.  Here CEO Chris Moody talks to about the use of social data by stock traders - affecting the market value of companies that are publicly traded.  Social data does affect value and make social networking companies more valuable.

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Don’t go all emotional when it comes to valuations | The National

Don’t go all emotional when it comes to valuations | The National | Social Media Company Valuations and Value Drivers | Scoop.it
Any asset is only worth what a buyer is willing to pay for it. And what we’re willing to pay needs to factor in what we can afford, not just how much we want or need it.
Tim Fernback's insight:

Editorial piece on the effect of emotion on valuation.  How do you compare valuations of Facebook and Twitter?  One was making money when it went public, the other is not.  Start differences, yet Twitter is valued equally as highly.  Some say emotion is involved here.

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Airbnb unleashes string of new products to strengthen its host community: 'We are a hospitality company'

Airbnb unleashes string of new products to strengthen its host community: 'We are a hospitality company' | Social Media Company Valuations and Value Drivers | Scoop.it
The interest in hospitality inspired the new products that Airbnb launched today -- the superhost program, stories, and groups for hosts.
Tim Fernback's insight:

Airbnb has raised $326 million in venture capital over the years and has hosted more than 9 million guests in 30,000 cities around the world. Its site features more than half a billion listings, and on a peak night this past summer, 175,000 people stayed in Airbnb properties on one night.

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Twitter Undervalued for Investors and Marketers | Social Media Today

Twitter Undervalued for Investors and Marketers | Social Media Today | Social Media Company Valuations and Value Drivers | Scoop.it
What is Twitter's real value? How does it compare to other social networks that have gone public? Part 1 of a three-part series.
Tim Fernback's insight:

Great piece on valuing Twitter($4.46B), LinkedIn ($25.25B), Facebook ($115.57B) Pinterest ($3.8B), Yelp ($4.09B), and Snapchat ($4.0B).  Looking at Value per User numbers (Shapchat is highest with $153.85/user and Yelp is lowest at $34.96/user).  

There are slight differences based on key KPIs ie For Twitter it is - Monthly Active Users and for LinkedIn it is - Monthly Unique Visitors.

BUT the relationship between valuation and users is almost linear (R2=0.99375) which is interesting.

 

Twitter's IPO Roadshow video (35minutes) is shown also.

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Facebook vs. Twitter: Which One Rules for Mobile Marketing?

Facebook vs. Twitter: Which One Rules for Mobile Marketing? | Social Media Company Valuations and Value Drivers | Scoop.it
Facebook has a lot of users and that equals a huge pool of potential customers - aka reach, but it's not always the advertising juggernaut y
Tim Fernback's insight:

Key value driver for both companies (Facebook and Twitter) include mobile.  Both companies are profiled.  Ability to access the mobile user and advertise to them is key to their revenue (and valuation) models.

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Bubbling Up: Should Twitter Really Be Worth More Than LinkedIn?

Bubbling Up: Should Twitter Really Be Worth More Than LinkedIn? | Social Media Company Valuations and Value Drivers | Scoop.it
The Twitter crew celebrates their hugely successful IPO (Image credit: AFP/Getty Images via @daylife) Twitter really is special.
Tim Fernback's insight:

Great commentary by Forbes on Twitter and its value proposition.  There is a comparison to LinkedIn.

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A Twitter User Is Worth $110; Facebook's $98; LinkedIn's $93

A Twitter User Is Worth $110; Facebook's $98; LinkedIn's $93 | Social Media Company Valuations and Value Drivers | Scoop.it
Investors are valuing Twitter at $114 per user - a number that's even higher than the per-user valuations for social-media darlings such as Facebook and LinkedIn.
Tim Fernback's insight:

It does not make too much sense to me that LinkedIn users are worth $93 and Twitter User is worth $110. I just chalk that up to IPO euphoria.

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Twitter IPO prices at $26 per share, above estimates

Twitter IPO prices at $26 per share, above estimates | Social Media Company Valuations and Value Drivers | Scoop.it
Twitter's original expected range was $23 to $25 per share.
Tim Fernback's insight:

It has been set - $26/share.  Valuing Twitter at $18.3B.  Raising $1.82B.  Not bad.  There are also 10.5M 30 day options going to the underwriters, so if these options are to carry a value, expect Twitter shares to have an incentive to go north of $26 after the IPO.  The underwriters shares will add another $280M to the company by the way.  A lot of wealth will be created tomorrow.

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Key numbers to know before Twitter's IPO

Key numbers to know before Twitter's IPO | Social Media Company Valuations and Value Drivers | Scoop.it
The long wait is almost over: Twitter will hold its public offering Thursday -- but is it a good buy? Here's a guide for the perplexed. Read this article by Jennifer Van Grove on CNET News.
Tim Fernback's insight:

Twitter's value metrics explained on the eve of the IPO.

Monthly active users (231.7M) = +39% YOY

Mobile Monthly active users (175M or 76% of the total) 

US Monthly active users = 52.7M

Daily active users = 100M - engagement rate is 43%

YTD revenue = $422.4M = +106% YOY

YTD Advertizing Revenue = $374.9M (89% of the total)

YTD Net Loss = $133.9M

 

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Exclusive: Report Says YouTube Overtakes Facebook Among Teens

Exclusive: Report Says YouTube Overtakes Facebook Among Teens | Social Media Company Valuations and Value Drivers | Scoop.it
YouTube is now the most popular social network among teens, according to a report.
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Brace yourself for a mobile acquisition feeding frenzy

Brace yourself for a mobile acquisition feeding frenzy | Social Media Company Valuations and Value Drivers | Scoop.it
Why consolidation will dominate a rapidly maturing mobile market over the next couple of years.
Tim Fernback's insight:

If you did not think that mobile was important to social media companies, large tech incumbants like IBM and Oracle are acquiring mobile businesses all the time.  IBM recently acquired FiberLink ($300M), UrbanCode, Worklight, Teusterr etc. and Oracle acquired Bitzer.  Other interested acquirers of this technology (mobile, mobile security, apps etc) are Cisco, SAP, Microsoft, Citrix, MaAfee etc.

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LNKD Is a Buy - Connect With LinkedIn Stock on Pullback

LNKD Is a Buy - Connect With LinkedIn Stock on Pullback | Social Media Company Valuations and Value Drivers | Scoop.it
LNKD stock has rolled back over 10% after Q3 earnings, but don't count out this social media player. LinkedIn stock is a strong buy.
Tim Fernback's insight:

LinkedIn's value is explained.  It is based on expectations and LNKD's strong growth (38% YOY for users and 56% for profit YOY)

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Snapchat: 'How To Make $3 Billion-Or Was It $4 Billion-Disappear' (And Other Quotes Of The Week)

Snapchat: 'How To Make $3 Billion-Or Was It $4 Billion-Disappear' (And Other Quotes Of The Week) | Social Media Company Valuations and Value Drivers | Scoop.it
The Dow and the S&P put in all-time highs again this week, but some are wondering if the Snapchat story marked the apex of a current tech bubble.
Tim Fernback's insight:

Did Google offer $4B for SnapChat?

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Tesla And Twitter Are In The Same Business Of Managing Expectations

Tesla And Twitter Are In The Same Business Of Managing Expectations | Social Media Company Valuations and Value Drivers | Scoop.it
Though making electric cars and running an online service couldn’t be more dissimilar, Tesla and Twitter are in the same business of managing expectations.
Tim Fernback's insight:

Great artice on managing expectations and how expectations relate to overall enterprise value.  

 

No brand can truly succeed, unless it finds ways to challenge and reset expectations to survive in the long term.  What has worked in the past, may not work in the future.

 

Twitter, as a more conventional tech play given that social media is a foregone conclusion these days and it is widely assumed that they will monetize (as have others in the past) ... Twitter therefore comes across as generically pleasant with no particular single voice.  To survive long term, Twitter will have to evolve into a more business focused firm in the future.

 

Tesla, on the other hand is a game changer, a rebel in a sea of conformists building a luxury product for a select few.  It manages expectations by focussing on the individual, Elon Musk.... rebel, innovator, game changer in the auto industry.  You are either for Tesla or against Tesla, so it caters not to the masses but to its dedicated base of supporters.  Folks that buy in to Tesla are on a crusade to change the world.   To survive long term, Tesla will have design automobiles for a wider consumer base.

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Facebook tried to buy Snapchat for $3 Billion (or three Instagrams)

Facebook tried to buy Snapchat for $3 Billion (or three Instagrams) | Social Media Company Valuations and Value Drivers | Scoop.it
Facebook bought Instagram for $1 billion. The Snapchat guys told Facebook to take a hike.  Facebook had earlier offered to buy Snapchat for more than $1 billion, the people briefed on the matter said.
Tim Fernback's insight:

Interesting article on Snapchat valuation : $3-4B based on  26 million users in the USA.  Facebook made an offer for $3B (cash) that was rejected by management.  Comparing Snapchat to Instagram (bought by Facebook earlier for $1B) and Tumblr (bought by Yahoo! for $1B).

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Apple and BlackBerry, together at last (in the loser's column)

Apple and BlackBerry, together at last (in the loser's column) | Social Media Company Valuations and Value Drivers | Scoop.it
Apple and BlackBerry can now be mentioned in the same breath as two major (or, in BlackBerry's case, once-major) mobile platforms that are decreasing in market share.
Tim Fernback's insight:

When considering the business models for various social networking companies and SaaS companies, you need to look at the market for mobile devices.  When you look for mobile, SN and SaaS companies should be developing for Android first (mkt is growing), iPhone second (mkt is declining) and Windows third (mkt is growing, but still less than 25% of iOS).  Blackberry is a distant fourth in marketshare and declining.

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If Apple were Twitter, how much would Wall Street pay for it? - Apple 2.0 -Fortune Tech

If Apple were Twitter, how much would Wall Street pay for it? - Apple 2.0 -Fortune Tech | Social Media Company Valuations and Value Drivers | Scoop.it
An active iTunes user generates $48 of revenue per year. A Twitter user, $1.36.
Tim Fernback's insight:

An interesting comparison of values between Apple (iTunes) and Twitter.  An Apple User generates $48/year (and they have 500 million active users online for iOS alone), while Twitter generates $1.36/user/year.  If $1.36/year generates an enterprise value of $110 per user - what is $48/user/year worth?

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After Twitter success, other tech companies consider IPO route

After Twitter success, other tech companies consider IPO route | Social Media Company Valuations and Value Drivers | Scoop.it
Twitter's lack of profits proved to be no obstacle to the micro-blogging site raising as much as $2.1 billion in its IPO. Its current share price of around $41 gives it a market value north of $22 billion.
Tim Fernback's insight:

Valuations for Box (file sharing service www.box.com valued at $1.2B), Square, and Airbnb (an accomodation service) are discussed.

 

DropBox is valued at $4B based on a recent financing (no plans to go public).

 

Pinterest is valued at $3.8B based on an Oct 2013 $225M financing.

 

Snapchat (photo-messagin application) valued at $800M based on a $60M raise - 9% of mobile users use Snapchat.

 

Evernote (notemaking service) is valued at $1B with 80 million users and $5/mo price for service.

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Newsle Lands $1.8M From Media Giant Advance Publications, Bloomberg Beta & More To Be The News Reader For People You Care About | TechCrunch

Newsle Lands $1.8M From Media Giant Advance Publications, Bloomberg Beta & More To Be The News Reader For People You Care About | TechCrunch | Social Media Company Valuations and Value Drivers | Scoop.it
Axel Hansen and Jonah Varon began building Newsle as undergraduates at Harvard to fill a nagging gap among today's news aggregators. The idea being that, as..
Tim Fernback's insight:

Newsle raises $1.85M in a Series A financing

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Twitter soars on Wall Street, avoiding Facebook's IPO woes

Twitter soars on Wall Street, avoiding Facebook's IPO woes | Social Media Company Valuations and Value Drivers | Scoop.it
Though Twitter left millions of dollars on the table, its first-day closing price was up 73 percent, giving the social networking company an impressive market cap of $24.48 billion. Read this article by Daniel Terdiman on CNET News.
Tim Fernback's insight:

There you have it.  Twitter is worth $24.48B.  Impressive.  This price should hold up for a couple days, but may fall back if the valuation metrics are not solid at $24B.  We can only see.

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Instagram Rival Mobli Gets $60 Million in Funding From Carlos Slim

Instagram Rival Mobli Gets $60 Million in Funding From Carlos Slim | Social Media Company Valuations and Value Drivers | Scoop.it
Mobli, an Instagram rival, has received $60 million in funding from Mexican billionaire Carlos Slim.
Tim Fernback's insight:

Mobli receives a $60M funding, now has raised $86M in total.

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8 Reasons Twitter Still Lags Behind Facebook

8 Reasons Twitter Still Lags Behind Facebook | Social Media Company Valuations and Value Drivers | Scoop.it
Twitter has not reached Facebook's level of influence just yet. This infographic shows how Twitter stacks up to Facebook in eight different ways.
Tim Fernback's insight:

Twitter and Facebook compared.  Apples vs. Oranges with Facebook the clear winner in terms of many different value metrics.

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