Monday, July 31, 2006

How much are the Web 2.0 users worth?

YouTube, Digg, MySpace: How much is a non-paying 'user' worth? by ZDNet's Donna Bogatin -- The big question is: How much are the Web 2.0 Social Web legions of non-contributing, and non-paying, users worth?

Using very rounded numbers, here is a “quick and dirty” analysis:

  • MySpace 2005 acquisition price: $580 million
  • MySpace 2006 “friends” user base: 100 million
  • MySpace 2006 ad revenues: $200 million

MySpace acquisition price reflects an approximate multiple of $5-$6 per “friend.”

MySpace is currently generating approximately $2 in revenue per “friend.”

The MySpace effort to grow ad revenues since its acquisition by News Corp. last year provides would be bidders for Digg, YouTube…a valuable reference for measuring the financial potential of a large, non-paying base of young Internet users.

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