Your Facebook Profile is Worth $306.12

what is your facebook profile worth value

I don’t have much to say on Facebook/Microsoft deal, expect to say,

“wow, that’s a lot of money.â€�

Nevertheless, I wanted to provide some vaguely helpful insight, so I started digging into a few numbers. My first thought was: I wonder what an individual profile is valued at under this deal? Also, how does that figure compare to Myspace two years ago? Furthermore, what’s the implication for the social networking marketplace?

Web 2.0 valuations are of interest to me because no one has come up with a method for valuing the hundreds (maybe thousands) of social networks and other platforms that exist. While some social networks are more valuable than others due to variables such as demographic make-up, or level of participation/engagement, all social networks share a common element: users. Ultimately, like Google Adsense which pays more for “better� keywords, I see social network advertising (and valuations) following a similar pattern of paying for higher quality users.

But, back to the Facebook deal. The interesting thing is that Facebook has little to no ‘real’ revenue to speak of, minus the guaranteed Microsoft deal and minimal flyer and sponsored group deals. Thus, the most valuable asset of Facebook, just like any other social network, is the number of users.

When Myspace sold in 2005 for a steal at $580M, they had approximately 22M users, meaning that each user was worth approximately $26 a person. In the case of Facebook, at a valuation of 15B, and 49M users, each user is worth $306.12. Thus, Facebook users are worth on average 11-12x Myspace users. I understand the math is shaky, but hey, I don’t see any real brainiacs taking a crack at this…

So at a very highest level, in two years users on the then ‘hottest’ social network were worth $26, now $300+. I’d say that either the social networking marketplace is still an interesting place to be or we’re in a serious bubble. However, the real test for long-term viability will come when the social graph is finally opened-up. Will people stay on Facebook? Will engagement be affected? Will Facebook’s new advertising platform kill it?

We shall see.


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