Is there a Tech Bubble?

RECENT OVER-THE-TOP VALUATIONS EXPLORED Is There a Tech Bubble? Are we in a time when investors are buying users rather than revenue? Many speculators are forecasting another online tech bubble in the works due to companies being valued far beyond their revenue streams. Here's a look at some of the most recent tech valuations that could be cause for concern. facebook. 2004 skype Facebook is founded. delicious 2006 Facebook turns down 2002 2003 $1 BILLION buyout from Yahoo. Delicious is founded. Skype is founded. Revenues are estimated at less than $100 MILLION, 2004 2004 2007 Delicious reaches 300,000 users. Skype generates $7 MILLION in yearly revenue. Microsoft buys a 1.6% stake of Facebook for 2005 $240 MILLION. Yahoo buys Delicious for a price estimated between $15-$30 MILLION 2005 This transaction values the company at $15 BILLION. Ebay buys Skype for despite the company's lack of revenue. Revenue stays between $2.6 BILLION, more than 37oX yearly earnings. $100-$150 MILLION. 2006 2009 2007 Yahoo does not monetize Delicious for the next 4 years. Revenue reaches about Skype's revenue falls far $700-$800 MILLION. below eBay's projections. 2010 Ebay takes a 2010 $1.4 BILLION Yahoo decides they cannot monetize Delicious. Facebook announces that it WRITE-DOWN has reached 500 million users. on the investment. Yahoo announces plans to retire Delicious as a "bad fit" Revenues reach about $2 BILLION. with their brand. 2009 Ebay SELLS 70% interest in 2011 2011 the program to various investors Former YouTube founders Facebook valuations reach to recoup some of its investment. Chad Hurley and Steve Chen $75 BILLION, making buy Delicious from Yahoo. the social network more 2010 valuable than Disney. CURRENT STATUS: Forecasts for 2012 predict Skype's yearly revenue reaches the company will go public $860 MILLION and is home ANNUAL REVENUE: $0.00 at around $100 BILLION, or 50X yearly earnings. to 170 million active users. RECENT VALUATION: $15-3O MILLION BUBBLE: CoX REVENUE 2011 CURRENT STATUS: ANNUAL REVENUE: $2 BILLION Microsoft buys Skype for RECENT VALUATION: $75 BILLION BUBBLE: 37.5X REVENUE $8.5 BILLION, Linked in nearly 10x yearly earnings. CURRENT STATUS: COLOR" ANNUAL REVENUE: $860 MILLION RECENT VALUATION: $8.5 BILLION 2003 BUBBLE: 9.8X REVENUE Linkedin launches. Sequoia Capital invests $4.7 million 2010 GROUPON in Series A funding. Color Labs is founded. 2004 Color spends $350,000 on its domain name Color.com. 2008 Greylock invests $10 million 2011 Groupon raises in Series B funding. $4.8 MILLION in Series A funding and is laur Color announces that it has raised $41,000,000 in its first round of funding from Linkedin reaches in November. 1.6 million users. Sequoia Capital, Bain Capital, 2009 and Silicon Valley Bank. 2005 In March, Color Labs releases Groupon is made Linkedin launches its first the first version of its App. available to 26 cities. premium service: Linkedin jobs. The app is free, and no revenue They raise another streams have yet been reported. $30 MILLION in Series B funding. 2007 CURRENT STATUS: Linkedin raises ANNUAL REVENUE: $0.00 2010 $12.8 million in Series C RECENT VALUATION: $41 MILLION BUBBLE: COX REVENUE funding from Bessemer & European Groupon raises Founders Fund. $135 MILLION in Series C funding. 2008 twitter The investment pegs the company's value at Linkedin raises $53 million $1.3 BILLION. in Series D funding from Bain Capital Ventures. 2006 Groupon's revenue hits about $760 MILLION. Linkedin raises $22.7 million Twitter is founded. in Series E funding from Goldman The company turns Sachs, Bessemer, The McGraw-Hill 2010 down a $6 BILLION buyout offer from Google. Companies, and SAP Ventures. Company revenues stay The company is valued at around $45 MILLION. 2011 $1 Billion. Twitter raises $200 MILLION from Kleiner Perkins Caufield & Byers. Groupon raises 2011 $950 MILLION Company valuation shoots in Series D funding. Linkedin goes public. to $3.7 BILLION, or more The investment pegs than 80X yearly revenue. Three days after the IPO, the company's value at stock prices skyrocket to $4.75 BILLION. $100/share. 2011 Groupon prepares for an IPO of Profit remains at as much as $25 BILLION, $1 billion more than Google's SharePost reports that $12 million/year. Twitter shares are trading at IPO in 2004. $34.50/share. CURRENT STATUS: CURRENT STATUS: CURRENT STATUS: ANNUAL REVENUE: $200 MILLION ANNUAL REVENUE: $760 MILLION ANNUAL REVENUE: $150 MILLION RECENT VALUATION: $9 BILLION RECENT VALUATION: $25 BILLION RECENT VALUATION: $7.7 BILLION BUBBLE: 45X REVENUE BUBBLE: 32.8X REVENUE BUBBLE: 50X REVENUE G+ SOURCES YAHOO NEWS I TECHCRUNCH | FAST COMPANY | ALLTHINGSD IFORBES | MSNBCc | SKYPE | TECHFRUIT I MASHABLE | WEALTHVEST I BUSINESSINSIDER I GIGAOM WSJ I CNET | LINKED I KISSMETRICS | THE ATLANTIC I gplus.com www.twitter.com/oplus www.facebook.com/gplus