Infographic: Recent Over-the-Top Valuations Explored

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

Presented by

Nicholas Jackson is a former associate editor at The Atlantic.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Technology

Just In