【Abstract】In the end, the valuation and potential of new platforms such as social media and Weibo have become the new focus of the global Internet. Whether it is the portal, search and e-commerce "old platform", or the operators and participants of the new platform for social media, the focus of the industrial chain of Chinese and foreign media platforms is concentrated on this.

Just after the world’s largest social network, Facebook, had a valuation of US$50 billion in the unlisted company’s stock exchange at the end of last year, investment institutions began to “endorse” this high valuation this week.

How the valuation and potential of new platforms such as social networking, microblog, etc. in the end has become the new focus of the global Internet. Whether it is the portal, search and e-commerce "old platform", or the operators and participants of the new platform for social media, the focus of the industry chain of Chinese and foreign media platforms has been concentrated on this.

Rising valuation

According to the "New York Times", investment bank Goldman Sachs and Russian Internet investment company DST have invested $500 million in Facebook, and two investors have valued Facebook at $50 billion. However, the parties refused to confirm this.

If this is the standard, then Facebook's "market value" has exceeded eBay, Yahoo, and other companies, becoming the world's third-largest Internet company, second only to Google and Amazon.

Goldman Sachs’ investment in Facebook was 450 million U.S. dollars, and DST was 50 million U.S. dollars. After DST had invested about 500 million U.S. dollars in Facebook, DST valued Facebook at 10 billion U.S. dollars.

Sellers do not know whether they will feel "regret" for their actions. Thomas Heilmann, co-founder of the German advertising company Scholz & Friends, recently sold his Facebook shares. He thinks Facebook's valuation is too "crazy." Previously, Accel Partners, a US venture capital firm, had also sold about $500 million of Facebook shares for a valuation of $35 billion. At that time, many people thought that the price was ridiculous.

Currently, the Securities and Exchange Commission (SEC) is investigating the equity transactions of unlisted Internet companies such as Facebook, Twitter and Zynga. The SEC has asked several participants in the stock exchanges of these companies to submit relevant information in order to find out whether some private companies are suspected of exploiting the private equity market.

So far, Facebook CEO Mark Zuckerberg has repeatedly stated that Facebook is neither eager to carry out IPO nor will it be sold externally. However, the industry estimates that Facebook's IPO is likely to be in 2012.

Facebook's stock has been traded on Second Market, a non-listed company's stock market, with the price of some investors buying Facebook shares, and the valuation has increased to $56 billion. Another Shares Post statistic shows that Facebook’s valuation has tripled during 2010.

In October 2007, when Microsoft and Li Ka-shing joined shares, Facebook was valued at US$15 billion. Facebook first publicly stated in September 2009 that it had begun to make profits; in July 2010, it announced that its users had surpassed 500 million, accounting for a quarter of the global Internet users. The company’s user growth rate far exceeds Google’s.

After Goldman Sachs injected funds into Facebook, Zuckerberg's personal wealth is likely to double. Forbes had estimated that Zuckerberg’s personal wealth should be around $6.9 billion when Facebook was valued at $23 billion. Currently Zuckerberg may be in the same position as Google's two founders, that is, about 15 billion US dollars.

Unfinished potential

According to statistics released by Hitwise, the US Internet traffic monitoring agency, Facebook surpassed Google as the most visited website in the United States during 2010: From January to November 2010, Facebook accounted for 8.9% of US Internet traffic. The corresponding rate for the website is 7.2%.

"Zacker's Law" establishes the same reputation in the Internet as "Moore's Law" in the field of semiconductors. Zuckerberg proposed in 2008 that the information users will share next year will be double this year, and the following year will be twice as much as the next year.

Its users have grown from 300 million to 350 million in only 3 months, and from 350 million to 400 million in only 2 months. Facebook uploads up to 2.5 billion photos a month, and each user spends an average of 55 minutes per day.

The research firm eMarketer research shows that in 2010, Facebook’s estimated revenue was about US$1.3 billion, and the research agency’s estimated Facebook’s revenue in 2009 was US$665 million, which is nearly double in 2010 compared to 2009.

Despite huge growth in operating income, according to Comscore, Facebook’s current CPM revenue is only $0.56, while the industry average is $2.43.

Facebook’s revenue per user per year is only $2.6, which has huge potential compared to Google’s $18 and AOL’s $12. If Facebook can find a way to make the average revenue per user approach Google, the market value is expected to exceed 150 billion US dollars.

When it comes to Facebook, users always think of the various games above. The real value of these games is the interaction between friends. This concept of Facebook has long been quickly learned by Chinese websites. Prior to parking sticks, stealing food, fishing, etc. quickly swept in China, happy network, QQ happy farms and imitate the fire. The big advertisers such as COFCO and L'Oreal also immediately placed advertisements on them.

Every user who makes a social game on Facebook has provided traffic for it. This traffic is even larger than the search engine that is considered to be an Internet portal. The diversified source of revenue around advertising is Facebook’s profitability.

The full use of player data is one of Facebook’s prospects, such as photos, friends, etc. in the player’s files. In the Facebook game, you can know the player's age, name, appearance and circle of friends.

Once the social network develops to a certain stage and users begin to actively participate, social connections will prompt users to share more frequently and more. This in turn will promote the participation of other users and promote a virtuous cycle of user interaction. Gradual user interaction will spawn new content.

Sequoia investment partner Shen Nampeng believes that Facebook's valuation today can be so high because it has a social circle of 500 million people. There are already a lot of developers on the Facebook platform, and some have reached nearly 1 billion US dollars. The turnover, which is close to $5 billion in market value, is achieved on the basis of an open platform.

For example, Zynga, a game software company based on the Facebook platform, has a current valuation of US$5.51 billion. This reflects an important reason for Facebook’s success: open applications. Facebook allows developers to use their platform to develop their own applications, Facebook provides open interfaces, third parties can read Facebook users and friends and other information, and then use this information to develop game tools and other applications. Facebook turns itself into a transparent mall, and the developer is the merchant in the mall.

Currently Zynga operates five of Facebook's seven most popular social games, including Texas Hold'em, Border Town, Mafia Wars, and Coffee World, while Facebook logs in users every day. Nearly 40% of them are playing Zynga games with friends.

For Facebook, you don't have to think too much about creative applications. Apps provided by other partners can stick to users who can play on Facebook longer, and advertisers can also use traffic to advertise.

Who is more potential

Google recently listed its top 10 competitors in documents submitted to the Securities and Exchange Commission, including Facebook and Twitter.

Chris Sacca, the Silicon Valley angel investor, said that before Google was listed, Wall Street investors did not have strong concerns. Today, investors realize that for Internet companies with huge growth potential, they should take the initiative.

Since last year, social media websites in the United States have been highly sought after. The United States buy site Groupon valuation of up to 6 billion US dollars. Weibo ancestor Twitter obtained a $3.7 billion valuation in a new round of financing in December 2010. In November 2008, Facebook originally planned to acquire Twitter for US$500 million, but it was unsuccessful.

In December of last year, in fact, Twitter's new investors already believed that Twitter's valuation will soon reach 8 billion US dollars. In the United States, Twitter is not yet a Facebook opponent because Facebook has three times as many users. Facebook is a network of relationships, and Twitter is more like a celebrity site.

“U.S. Twitter cannot exceed Facebook.” After a well-known Internet investor, Cai Wensheng, said after investigation.

At present, Twitter has published an average of 65 million messages per day, and its users are about 175 million. Nearly 50% of Twitter users rarely or never read Twitter posts posted by others through Twitter.

But if it is only for making money, Twitter can also be profitable through advertising. SocialTwist's survey shows that the average click on Twitter is as high as 19.04, while Facebook is only 2.87. Although Twitter is not as big as Facebook on the scale of users, Twitter’s advertising appeal is no less than Facebook’s in terms of marketing effectiveness.

According to Li Kaifu, the creator of the Innovation Workshop, the Twitter platform is a one-way media platform and Facebook is a two-way social platform. Now it seems that both have value, and the two-way social platform is more valuable.

Chinese sample

But China is another case. Sina, Tencent, and Sohu's Weibo are more popular than Kaixin and Renren. Because in China, both social networking platforms such as Tencent, Kaixin and Renren have all started from closure, and now they are trying to open up.

In 2010, Kaixin.com had a revenue of around RMB 300 million. Its main sources of revenue include online advertising, user value-added services, and operation of third-party components, among which online advertising accounts for about 80% of total revenue. Kaiping Chang, the founder of Kaixin.com, stated at the 2011 annual job fair that Kaixin.com has achieved scale profitability from the second quarter of 2010 and earned more than RMB 10 million each month. As of August 2010, Kaixin.com has registered more than 86 million users.

IResearch predicts that SNS will attract 1.11 billion yuan in advertising in 2010. In 2011, SNS's advertising market will reach 1.99 billion yuan, an increase of 79.3%.

"In the long run, if it is not open, Tencent etc. may only get a small portion of Facebook's value, plus a small portion of Zynga's value." Kai-fu Lee believes.

According to Cai Wensheng, it is difficult for Tencent to be completely open, but Sina Weibo is more like Facebook after being improved. Sina Weibo is trying to introduce third-party application development. This is taking the path of Facebook instead of Twitter.

Sina’s Weibo users reached 50 million after the first anniversary of the operation of Weibo and 25 million messages were published every day. China’s microblog market has reached 100 million users. Sohu and Tencent also began to pay attention to the Weibo project.

Because the Weibo business is developing smoothly, Wall Street has already regarded Sina as "China's Twitter." The market value of Twitter rose from US$1 billion to US$3.7 billion within a year. Sina's stock price thus began to rise in July 2010, rising from around $35 to $70, almost doubling. The research report released by Goldman Sachs in December 2010 valued Sina Weibo at US$720 million and increased Sina’s target price within 12 months to US$80.

The internal logic of this round of valuation is that it is harder and more important to obtain 100 million users first than to obtain 100 million U.S. dollars. As long as there are users and high-viscosity, explosive traffic platforms, revenue and profit are not problems, and investors The mentality is that the sooner the better, so the valuation was raised earlier.

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