Transcript How Do You Value Friendster?

How Do You Value Friendster?
CHAPTER FOUR CASE STUDY
P. 38
JOSH STEGEMANN
Major Points
 Jonathon Abrams: Friendster creator
 Laid off from Netscape, financial troubles
 Friendster founded in 2002, social networking site
 5 million users, 50,000 page views a day
 Free service, non revenue generating
 Valued at $53 million by Benchmark Capital
 Currently looking into adding paid subscriptions
 Google offered $30 million for Friendster
How could you use efficiency IT metrics to help place a value
on Friendster?
 Web Traffic- 5 million users, 500,000 web views per
day
 System Availability- 24 hour social networking site
 Response time- instant feedback, high speed
connections
Efficiency- performance of the system, Do things right
How could you use effectiveness IT metrics to help place a
value on Friendster?
 Usability- easily navigated site, number of clicks
 Conversion rates- Users switching from other sites
like Facebook and MySpace
 Financial- No ROI yet, paid subscriptions could help
determine
Effectiveness- impact IT has on business processes,
Doing the right things
Explain how a venture capital company can value Friendster at $53
million when the company has yet to generate any revenue?
 IT Efficiency- click through rates, number of users
 IT Effectiveness-potential revenue
 Web traffic analysis- page views, length of stay on
site, date and times of visits, demographics
Explain why Google would be interested in buying Friendster for $30
million when the company has yet to generate any revenue?
 IT effectiveness and efficiency
 Growth has peaked, value dropping
 Buy cheap, continue with registration fees
Current Information
 Top 20 global website based on traffic
 #1 social networking site in Asia, expansion into
foreign markets
 In Philippines, transfer money using GCASH
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http://sev.prnewswire.com/computer-electronics/20090302/SF7760202032009-1.html
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http://sev.prnewswire.com/computer-electronics/20090210/SF6917010022009-1.html
Conclusion
Thank You! Any Questions?