An open letter to Mark Zuckerberg (Facebook)
aarongreenspan.com
aarongreenspan.com
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.
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's refreshing to see someone NOT jump at the chance to sue FB, and arguably his case would be most likely to succeed.
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.