I love it
Listening to Mark Zuckerberg speak is about as revealing and insightful and boring as the economics teacher on Ferris Bueller’s day off. That is to say: he’s right up there with the Google triumvirate on quarterly conference calls.
But with that aside, I love the rumors he is negotiating to sell a 5% stake for between $300m-$500m (i.e. a $6bn - $10bn valuation).
Facebook and MySpace are the oxygen of ad networks that are scrambling for relevance and to which GYM are doing their best to buy up every last one of.
Ad Networks can happily balloon to billions of ad impressions per month, reach nearly all of the Internet’s audience and have tens of millions of revenue. But while everything looks rosy on the outside of the house, margins die and publishers like Faceboook/MySpace build their internal sales force and other startups with better algorithms figure out how to pay more for inventory they used to be able to buy.
Luckily for most of them, the music is still playing. AOL, Yahoo, Microsoft and Google will realize soon they overpaid for almost all the ad network assets sold this year (ad.com was a steal).
But I digress. The driver’s seat in all of this are Facebook and MySpace and their importance increases with time. They own the consumer relationship and that is all that counts.
As GYM pushes more and more into the ‘advertising operating system’ mantra (although at least Google bought Youtube), Rupert and Zuckerberg are allowed to compete for what counts while the large Internet companies act as shoe shiners bidding ever more vigorously for 90% revenue share deals to service them.
