Yahoo! To Facebook: Still Too High A Price

By Douglas A. McIntyre Published Apr 4, 12:47PM EDT

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Peter Thiel, a shareholder in social network site Facebook, claims that the property is worth $8 billion.

In his wildest dreams.

Barron’s points out that investment bank Needham is beating on Yahoo! (YHOO) for not buying Facebook for well over $1 billion. Needham’s argument is that Facebook has over 21 million registered users and 1.5 billion pageviews a day.

The advertising at Facebook should not give anyone a lot of faith that this is a big business, at least not financially. Ads like Extended Stay Hotels.

Comscore says that Facebook as 16.7 million unique visitors a month. Even better, the site has 24 visits per unique visitor, putting it just behind Yahoo! among all web properties.

Facebook is big with the 17 to 25 year old age group. That is not exactly the most wealthy demographic group, which ought to discount the value of those visitors.

As to value, YouTube went for over $1.6 billion, but it had a larger audience than Facebook. CNET (CNET), which has 30 million unique visitors a month, has a market cap of $1.3 billion. And, its audience is highly qualified and affluent.

The New York Times digital properties have a unique monthly audience of almost 40 million. The market cap of the entire New York Times Company (NYT) is only $3.4 billion. It even includes those worthless big newspapers.

Maybe Facebook is worth $1 billion, maybe less. But more? No way.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.