Or that must be what it looks like to your average corn farmer in Nebraska.

I don't read the financial media much, but having spent 3 years working on Yahoo! Finance, it's hard not to do so once in a while. I came across a story today titled "Is Google worth as much as Yahoo?" by Bambi Francisco (love that name).

As is often the case with CBS MarketWatch stories, it goes into quite a bit more than the headline might lead you to believe. In this case, she spends some time discussing Google's self-appraised valuation of $17-$19 billion and then draws to a close with:

At the bandied-about price, Google would also be valued at a slight discount to Yahoo and possibly greater than Amazon.com. Both of those are arguably mature, established, not to mention older, companies with relatively proven track records.

And then she turns her focus to Friendster.

Google's outlandish valuation is likely why Friendster, the fast-growing online dating/social-networking company, is leaning towards accepting funds from blue chip venture capitalists rather than selling to the search company, according to those familiar with the situation. The word is that Friendster had conversations with Google to be bought out for about $30 million to $40 million in Google stock at an $18 billion market valuation for Google. At that price Friendster's upside may be limited, to say the least.

Of course, she reminds us that

Friendster has yet to post sales, much less a profit. Yet Friendster has apparently secured $13 million in funding, giving it a valuation of $53 million. Jonathan Abrams, Friendster's founder has not returned my call seeking comment.

If that seems a bit insane, we're reminded that:

InterActiveCorp's online dating services, including Match.com, Udate.com and Kiss.com, have 857,000 paying subscribers, as of the end of second quarter. IAC estimates that its online dating services will earn $38 million in cash flow this year, up from $28 million. Applying a 20 multiple on cash generated would give IAC's dating business practically an $800 million market cap, if it were a stand-alone company. This back-of-the-envelope-valuation exercise makes a potential market cap of $50 million for Friendster far more reasonable, say those familiar with the situation. That's because Match alone has 9 million subscribers (only some are paying subscribers) while Friendster has 2 million subscribers.

Valuations are funny things, aren't they?

[Disclaimer: I know several of the guys at Friendster, including Jonathan. I mean no disrespect. They're working hard to build a company and a service in shitty economic times. I just can't help but to be amused by this Google inspired flashback to the late 90s.]

Posted by jzawodn at September 30, 2003 12:21 PM

Reader Comments
# Mike Hillyer said:

Man, last time I was in Silicon Valley all I did was spend money. I have to get down there and accept my bag of cash.

on September 30, 2003 12:43 PM
# Barry Parr said:

How can they transition from a cash-flow-based valuation of match.com (entirely rational) to a membership-based valuation of friendster, since " Friendster has yet to post sales, much less a profit."

Pass the pipe, I clearly need a hit.

on September 30, 2003 01:49 PM
# John Thomas said:

Well, there's far far less dot com crack smoking these days.

I think Google's a fantastic example of a successful company.

on September 30, 2003 01:52 PM
# Jeremy Zawodny said:

John:

No doubt. They're quite successful.

Jeremy

on September 30, 2003 01:57 PM
# john said:

Can we skip reading the article and just focus on Bambi and Trish for a second?!?

on September 30, 2003 02:05 PM
# munger said:

"Or that must be what it looks like to your average corn farmer in Nebraska."

Nah. Let's not overdramatize Silicon Valley. I'm guessing the average corn farmer in Nebraska doesn't give a damn about SV.

on September 30, 2003 04:13 PM
# engagement said:

I just wonder how existing Friendster users will react to traditional fees, if thats the plan.

on September 30, 2003 07:21 PM
# said:

tupacmybrotha@hotmail.com is life awere to people u know tio be or not to be that is thus question this email has all the answers to all ur needed questions just add and ask

on September 30, 2003 11:55 PM
# anonymus said:

tupacmybrotha@hotmail.com is life awere to people u know tio be or not to be that is thus question this email has all the answers to all ur needed questions just add and ask

on September 30, 2003 11:56 PM
# anonymus said:

tupacmybrotha@hotmail.com is life awere to people u know tio be or not to be that is thus question this email has all the answers to all ur needed questions just add and ask

on September 30, 2003 11:56 PM
# anonymus said:

tupacmybrotha@hotmail.com is life awere to people u know tio be or not to be that is thus question this email has all the answers to all ur needed questions just add and ask

on September 30, 2003 11:56 PM
# Aaron Brady said:

Comment spam? I got yer comment spam right here! ^^^

And it doesn't even advertise a URL..

on October 1, 2003 01:29 AM
# Sam W. said:

Are Bambi and Trish replacing the aging Kim Komando and Soledad O'Brien?

on October 1, 2003 01:47 AM
# Matt Szubrycht said:

`anonymus' can't spell and is probably trying to get someone mailbombed.. as to Google, thank God for Google!

Peace,
Matt

on October 1, 2003 06:01 PM
# ShoppingCartStar said:

Wow....Bambi is a looker ! and whatever she says goes, as far as I am concerned!

on October 9, 2003 10:43 PM
# said:

Hello...I am concerned about a loved one...Does a Q-TIP have anything to do with smoking crack...Thank you for your time...

on April 2, 2007 02:06 PM
# Holly said:

Silicon Valley is a mecca of wealth and good times!

on April 7, 2008 11:15 PM
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