As the letter states: Yahoo paying FB $100 per user, and not every FB user buying anything worth $100. So the Yahoo offer is much more lucrative.
Is it a justifiable to work on this idealogy for an acquisition? Say, for xyz.com, if each user brings in $10 on average (through advertising or sales), should the acquisition value (per user value) be more than that amount?
>Say, for xyz.com, if each user brings in $10 on average (through advertising or sales), should the acquisition value (per user value) be more than that amount?
The gospel is that the value of a company is the total value of expected future cashflows. This generally applies to publicly traded companies.
AFAIK acquirers typically pay more than the market value since the acquirer usually perceives more value for it. Eg. Yahoo and MSFT may be able to make more money with facebook than facebook can by itself. Their bidding can drive the price up.
There are also strategic reasons. Eg: Yahoo might die if MSFT acquires facebook instead. This can also drive the price up.
It is unfortunate because it seems that those that succeed (especially in the computer industry) are the biggest jerks.
The article does mention Gates, who was involved in some pretty shady stuff when it comes to establishing Windows. You learn about Steve Jobs and his early times at Apple and it is apparent he treated a lot of people like complete shit. Steve used Woz quite a bit, too.
And then there's Zuckerberg...he might end up being a billionaire but it seems that he had to step on a lot of people to do it.
What's that quote from the Bible? 'What good is it to gain the whole world but forfeit your soul?' There's a lot of smart people here at news.yc - I hope if any of you hit it big you won't let money and fame consume you.
In case anyone's interested, Aaron and I are now working on a new startup called Qubescape. If you want us to let you know when we go live, just give us your email address at http://www.qubescape.com (and if you're looking to join a cool new startup, send us an email!)
Is it a justifiable to work on this idealogy for an acquisition? Say, for xyz.com, if each user brings in $10 on average (through advertising or sales), should the acquisition value (per user value) be more than that amount?
I'm not quite aware of this, so thought I'd ask.