I loved this outside-the-box thinking by Jason Kottke on Facebook’s Valuation so I’m reblogging:
Burger King recently introduced a Facebook app called Whopper Sacrifice that allows users to delete ten of their friends in exchange for a Whopper sandwich. Watch the app in action.
What BK has unwittingly done here is provide a way to determine the valuation of Facebook. Let’s assume that the majority of Facebook’s value comes from the connections between their users. From Facebook’s statistics page, we learn that the site has 150 million users and the average user has 100 friends. Each friendship is requires the assent of both friends so really each user can, on average, only end half of their friendships. The price of a Whopper is approximately $2.40. That means that each user’s friendships is worth around 5 Whoppers, or $12. Do the math and:
$12/user X 150M users = $1.8 billion valuation for Facebook
That’s considerably less than the $15 billion valuation assigned to Facebook when Microsoft invested in the company in October 2007 and the lower valuations being tossed about in recent months.
