Thursday, October 25, 2007

Crazy Talk

This week's show was Interop in NYC at the Javits. I had a few frank conversations with fellow CEO's and investors that came by our booth and almost all of the talk turned to this week's investment (Microsoft at $240 million and two funds at $500 million) and valuation ($15 billion) for Facebook.

I'd say that almost everyone commented at how crazy the valuation came in at. Regardless of what anyone thinks, the reality is that the investors thought it was a good number. After all, they agreed and paid on the line. Nobody put the gun to their head.

Mark has built some serious value in an amazingly short time. But the real question isn't about the sanity or importance of the valuation, its Facebook's ability to sustain. Social sites like Facebook can grow quickly, but just as easily that traffic can get cold and something new can come along. In this case, Mark can pull enough cash from the company to not worry about it again for generations and keep playing the game as long as it suits him. Even if it tanks, he's sittin' pretty.

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