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Nicholas Jackson

Nicholas Jackson - Nicholas Jackson is an associate editor at The Atlantic, where he oversees the Health channel. A former media aggregator for Slate, he has also worked for Encyclopaedia Britannica, Texas Monthly and other publications.

Infographic: Recent Over-the-Top Valuations Explored

By Nicholas Jackson
Jun 1 2011, 7:50 AM ET Comment

Recent over-the-top valuations on the secondary market for Facebook and other technology companies combined with Microsoft's acquisition of Skype for more than $8 billion has many wondering if we're in the process of inflating another tech bubble. When it pops, like the dot-com bubble of the late '90s eventually did, we will all be hurt, say those worried about current valuations.

G+, a website which attempts to provide a forum for academics, entrepreneurs and other influentials to discuss and debate social media news and valuations, recently put together an infographic that takes a look at the history of some of today's highest-valued technology companies. It clearly shows that, today, we're placing more value on users than we are on revenue. Let us know: Do you think that things are starting to get a little out of control?

Infographics are always a bit of a hodgepodge of statistics culled from a variety of sources. Here, we sort through the clutter and pull out some of our favorite facts and figures:

  • Skype was generating about $7 million in annual revenue only two years after the company was founded in 2002. The following year, 2005, eBay purchased the service for $2.6 billion, but took a $1.4 billion write-down only two years later. Two years after that, eBay sold 70 percent interest in Skype and, the following year, annual revenue climbed to $860 million. Microsoft purchased Skype in 2011 for $8.5 billion.
  • LinkedIn launched in 2003 with $4.7 million in Series A funding. Investments continued to pour in over the years and the company went public in 2011 with stock prices skyrocketing to over $100/share only three days after the IPO. Profit remains at only $12 million per year.
  • Groupon raised $4.8 million in Series A funding in mid-2008 and launched in November. By 2010, the company reported annual revenue of $760 million and another investment pegged Groupon's value at $1.3 billion. Later that year, the company rejected a $6 billion buyout offer from Google. Today, Groupon is reportedly preparing an IPO of as much as $25 billion, or more than Google's IPO in 2004.
  • Facebook was founded by Mark Zuckerberg in his Harvard dorm room in 2004. Two years later, Zuckerberg turned down a $1 billion buyout offer from Yahoo even though annual revenue was less than $100 million. By 2009, revenue had climbed to somewhere between $700 million and $800 million per year and, in 2010, the social network announced it had recorded its 500 millionth user. Today, Facebook valuations reach $75 billion, making it more valuable than Disney.

Check out more Infographics on the Technology Channel.

social-media-valuations-640.jpg



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