G’day – to all my Australia friends and colleagues and those of you with an affinity for anything Aussie…enjoy the day!
It’s going to be a long one for me – boarding a plane from Sydney and 14 hours later arriving in San Francisco….it will still be Australia Day – w00t!
Adam Ostrow has an interesting analysis of the worth of a Facebook Application User in terms of advertising revenue and company valuation, which he has derived through the OTC filings of SNAP Interactive:
SNAP reported $388,000 in revenue for their fourth quarter, which was up from $35,383 in the third. They attribute the growth to their applications: “Are You Interested” finished December with 5.2 million users, while “Meet New People” claims 350,000. Thus, it can be determined that each user was worth about 7 cents in revenue to SNAP in the quarter, or about 28 cents per year (388,000/5,500,000 * 4).
As deals become more common in the Facebook application space, the question becomes how much is a user worth? As a publicly traded company, SNAP is sporting a market value of around $10 million. At its current pace, the company looks to pull in $1.5-$2 million in revenue this year, meaning its price-to-sales ratio is 5:1. If you assume a 5x price-to-sales ratio, that would mean each one of SNAP’s users is actually worth around $1.40 (each user pulls in $0.28/yr, if the company is valued at 5x sales, you arrive a $1.40 per user valuation).
I’ve spent a good deal of time analysing the open source arena. First up I was instrumental in preparing an Australia-specific alternative open source license (the Trade Practices Act has some quirks that made this seem a prudent move), through to steering a spin out, open source, virtualization company to fruition (Open Kernel Labs).
With OK Labs we delved deep into what works and what doesn’t in the open source arena, and much like with anything in life, the answer is that users don’t like surprises: if you intend them to pay for a version of your software at some stage be upfront about it.
We spoke with many of the key players in the open source arena and I have always been bullish that open source works as a business model. So it is especially satisfying to observe that MySQL, one of the shining lights of open source, has been acquired by Sun for $1 billion. Sun’s CEO, Jonathan Schwartz points out that Sun has been a big supporter of the open source model and that MySQL users will benefit from the support offerings they intend bringing to the MySQL marketplace.
In other open source news, London-based Openads has completed a $15.5 million Series B financing led by Accel Partners. The company has developed an open source ad server, which is currently used by more than 30,000 publishers, delivering billions of ads daily.
Commenting on the deal, Accel’s Andrew Braccia said, “The rapid growth of the global online advertising market requires the adoption of next generation infrastructure and services for publishers and advertisers alike.”
“Openads’ open source heritage and deep global publisher footprint make it uniquely positioned to play a pivotal role in the evolution of the digital media landscape.”
UPDATE: Facebook has released an animation library for its FBJS (a layer on top of Javascript that give the full power of Javascript in applications) under a modified BSD license. Neat stuff.
Empire of Sports, the sports-based MMORPG, is being spearheaded into China by Giant Interactive Group.
Developed in Switzerland, Empire of Sports is a virtual sports world. In it players assume the role of a single character throughout the game. They are able to compete in virtual international events as part of a team and currently they can play basketball and tennis, go skiing and participate in a series of fitness and training games.
Wei Liu, Giant’s President believes that, “With the 2008 Beijing Olympic Games nearing, interest in sports-related games is poised to increase.”
Giant has signed an exclusive license that expires in September 2011.
“Soulja Boy has set the bar for what’s possible in terms of breaking an artist online”, says Steve Berman from Interscope Geffen A&M Records.
Rap phenomenon Soulja Boy has racked up 3 million downloads of his Grammy nominated song “Crank That (Soulja Boy)”. But check our these other stats, simply awesome:
* More than 3 million ringtones sold
* YouTube video viewed 28 million times
* 22 million viewings of his instructional dance video
* 1 million website uniques a month.
What’s this 17 year old’s response? “Yuuuuaaaa!”