Presentation on theme: "CHAPTER FOUR CASE STUDY P. 38 JOSH STEGEMANN How Do You Value Friendster?"— Presentation transcript:
CHAPTER FOUR CASE STUDY P. 38 JOSH STEGEMANN How Do You Value Friendster?
Major Points Jonathon Abrams: Friendster creator Laid off from Netscape, financial troubles Friendster founded in 2002, social networking site 5 million users, 50,000 page views a day Free service, non revenue generating Valued at $53 million by Benchmark Capital Currently looking into adding paid subscriptions Google offered $30 million for Friendster
How could you use efficiency IT metrics to help place a value on Friendster? Web Traffic- 5 million users, 500,000 web views per day System Availability- 24 hour social networking site Response time- instant feedback, high speed connections Efficiency- performance of the system, Do things right
How could you use effectiveness IT metrics to help place a value on Friendster? Usability- easily navigated site, number of clicks Conversion rates- Users switching from other sites like Facebook and MySpace Financial- No ROI yet, paid subscriptions could help determine Effectiveness- impact IT has on business processes, Doing the right things
Explain how a venture capital company can value Friendster at $53 million when the company has yet to generate any revenue? IT Efficiency- click through rates, number of users IT Effectiveness-potential revenue Web traffic analysis- page views, length of stay on site, date and times of visits, demographics
Explain why Google would be interested in buying Friendster for $30 million when the company has yet to generate any revenue? IT effectiveness and efficiency Growth has peaked, value dropping Buy cheap, continue with registration fees
Current Information Top 20 global website based on traffic #1 social networking site in Asia, expansion into foreign markets In Philippines, transfer money using GCASH