Read/Write Web did a piece this week on Vancouver-based Plentyoffish.com, which as you know is Canada’s and the U.K.’s #1 online dating site, where Markus Frind asserts that if Facebook is worth $15Billion, POF should be worth at least $1Billion:
So getting down to nitty gritty metrics, Markus concluded that "Facebook is only able to generate 10 to 15 times as many clicks on ads as my site and it’s valued at 15 billion. Needless to say I’m watching ad supported business model valuations very closely." What’s more, some of his direct competitors - e.g. Eharmony and match.com - are apparently valued in the billions.
While Markus didn’t put a figure on what PlentyOfFish is probably worth, it’s clear he is thinking in Billions and not Millions. It’s very hard to quantify this, but at the very least POF would be worth in the 9 figures due to its annual revenues of $10M. Not bad for a one-man company (plus a new Customer Service Rep!). Source: Plentyoffish: 1-Man Company May Be Worth $1Billion
My buddy Mark Evans, former b5 dude and tech-finance journalist for the National Post, thinks this is a sign of the much-feared "bubble" (and of course bubble’s always burst):
The $1-billion premise hinges on Frind’s contention that POF makes $10,000 a day from AdSense, and will generate about $10-million in revenue this year. Combine that with POF getting 1.2 billion pageviews a month, 500,000 unique log-ins a day and significantly better click-through rates than Facebook - and lets encourages Frind to start talking about an ultra-high valuation. Source: Mark Evans Tech
Mathew Ingram, who writes a tech column for The Globe & Mail, compares Markus or Craig Newmark (Craig’s List, of course), and is much more charitable than Mark was on the whole valuation thing. I think a billion isn’t too far off the mark, actually. Markus has, imo and as he states in the R/WW article, has much better ad positioning and placement than Facebook has by a long shot. Having been on POF for a while, though no longer, and use Facebook daily I agree with Markus 100%. His ad placements are effective in getting your attention and therefore increasing the chances of generating a response.
While his traffic number could be suspect, I have a feeling that the online dating realm has stronger legs, in the long term, than Facebook as a pure social network. Look, no matter what, people do want to connect and find a mate. In our frenetic 21st century lives, meeting people online is just easier and more convenient. Funny enough I would often "meet" someone on POF then add them as a friend of Facebook. Facebook, and other social networks do feed our need to connect and be social, but on a higher level. Online dating, you’re right down there in key social needs.
I know from talking to Markus in the past, he doesn’t have much interest in selling, yet. However I wonder if Yahoo or Google came knocking if he’d be able to resist the allure of selling to them?
October 31st, 2007 at 8:38 pm
I’d be very, very surprised if Google or Yahoo were interested in POF. Perhaps IAC, which needs some growth engines judging by its Q3 results.
October 31st, 2007 at 10:43 pm
Where this all gets silly is if you add up all the various “Web 2.0″ properties and then multiply their revenues by Facebook’s 100x revenue valuation you probably get an industry with total value greater than the GDP of Planet Earth for the last millenia or something.
OK, I exaggerate, but its to make a point. There is a sharp power law in valuations of companies, its not linear.