In Figures: The value of networking

Corporates are prepared to pay an astonishing amount for social networking sites - much more than their earnings imply.

by Nick Loney, World Business

In June, News Corporation reportedly offered to sell MySpace, its internet social networking site, to Yahoo in return for a 25% stake in the company. As Yahoo is currently worth $37 billion, a quarter stake in an enlarged company would be worth about $12 billion - a hefty valuation for MySpace given that News Corp paid only $580 million for it two years ago. Yahoo tried and failed to buy Facebook, the number two social networking site, for $1 billion last year. Such figures are extraordinary given that these companies are many years away from the kind of earnings that these valuations imply. US market researcher eMarketer estimates that total worldwide advertising spending on social network sites will reach $1.2 billion this year, rising to $3.6 billion by 2011 - just over a quarter of the $12 billion that MySpace is apparently worth now. The question is: in a fledgling and rapidly evolving industry such as this, who knows which horse to back?

"An online community that lets you meet your friends' friends"
Worldwide unique visitors
107 million - Mar 2007

Unique visitors as percentage of total internet users
US 39% - May 2007
UK 40%* - Apr 2007

Launched: December 2003 by Chris De Wolfe and Tom Anderson
Value: News Corp bought it for $525m in 2005, but is now thought
to value it at about $12bn

Features: Allows users to share profiles, blogs, photos, music and

"A social utility that connects you with the people around you"
Worldwide unique visitors
32 million - Mar 2007

Unique visitors as percentage of total internet users
US 15% - May 2007
UK 12% - Apr 2007

Launched: February 2004 by Harvard University student Mark Zuckerberg
Value: Yahoo attempted to buy it for $1bn last year

Features: Users create profiles that contain photos and lists of
personal interests, exchange public or private messages, and join groups
of friends

"Members can stay in touch with their college friends, connect with
friends, share photos, discover new interests and just hang out"
Worldwide unique visitors
14 million - Mar 2007
(Bebo claims a global network of over 31 million users)

Unique visitors as percentage of total internet users
US unknown - May 2007
UK 27% - Apr 2007

Launched: January 2005 by Michael Birch and his wife, Xochi Birch
Value: About $780m

Features: Users post pictures, write blogs and send messages
Source: comScore World Metrix; US data home, work and university
locations; UK data age 15+ home and work locations, excluding access
from internet cafes, mobile phones and PDAs; * figure for Fox
Interactive Media

US: bn 34.99 7.16 1.31 0.29 0.26

UK: bn
Google 3.78
eBay 3.73
Yahoo! 2.03
MSN/Windows Live 1.99
Fox Interactive Media* 1.43
Bebo 1.34
BBC 1.19
Facebook 0.59
Amazon 0.49
Virgin Media 0.40

US minutes 206 175 151 32 19

UK minutes
RuneScape 392
Electronic Arts Online 187
Bebo 157
Facebook 148
eBay 115 113
Adventure Quest 95
Fox Interactive Media* 71
Club Penguin 70
Cartoon Network 69
Source: Nielsen//NetRatings; UK NetView home and work data, excluding
applications; *MySpace; **among the 500 most popular online websites by
UK unique audience

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