[runako]

I think we may be talking about two different sets of numbers. It sounds like you're quoting GOOG's penetration into US (or OECD) total population. (I'm guessing from the percentages.)

I'm saying that the aggregate number of people using the Internet has grown much, much faster. I don't have exact numbers handy, but it's certainly possible that the total Internet population has grown more than 100% over this period.

You also raise an interesting point about frequency of usage, which would also contribute to valuations.

In 2012 it doesn't require huge leaps to see how a company Pinterest rapidly could get to revenue numbers that support this valuation. At YHOO's current revenue-multiple-margin mix, this would imply revenues of around $400m-$500m. I don't know what their revenues are now, but given their growth and reach I'd be surprised if investors didn't pay a higher multiple for Pinterest than for YHOO.

[jarek]

Total number of people using the internet seems like a questionable metric for valuating U.S.-based internet startups, most of which (understandably given their business stage) focus primarily on the U.S. and maybe OECD for feature development, user base growth, and monetization. It's currently a bit laughable to imagine Pinterest monetizing their Nigerian and Indonesian user bases. Is there any particular datapoint that would lead us to believe their userbase significantly extends or will extend beyond the OECD?

It's like valuating a paper products company by the total number of people in the world. Sure, they all might be able to or even want to use a paper product, but what's important when making the call is the company's ability to sell to them while still making money.

[robryan]

People are also far more comfortable spending online now, this helps both in directly monetizing users an the amount people will pay for ads.