Comments on: Memo to Mark Zuckerberg: The Chicken or the Egg (or the Golden Ticket) http://kara.allthingsd.com/20080520/memo-to-mark-zuckerberg-the-chicken-or-the-egg-or-the-golden-ticket/ Fri, 10 Feb 2012 23:01:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: dave mcclure http://kara.allthingsd.com/20080520/memo-to-mark-zuckerberg-the-chicken-or-the-egg-or-the-golden-ticket/#comment-3241 dave mcclure Wed, 21 May 2008 18:38:13 +0000 http://kara.allthingsd.com/20080520/memo-to-mark-zuckerberg-the-chicken-or-the-egg-or-the-golden-ticket/#comment-3241 upside on him waiting: Facebook really hasn't hardly dipped a toe in the water on monetization features, and there's tremendous reason to be optimistic for better performance over next 1-3 years (within the timeframe they'd need to either consider IPO, selling, or raising more debt/equity capital). regardless if any of this works, the ceiling certainly feels like it would be north of $15-20B. so unless the MSFT deal is substantially closer / higher than that, my guess he defers for at least a year or more on pulling the trigger. downside on not waiting: possible that growth could crest (or even wane), monetization features don't work out / don't bear much fruit, or that other players (Google, LinkedIn, MySpace, other newer startups) figure out a better mousetrap. however, i don't think the downside means Facebook = zero value, it might just mean that the floor is $5-10B instead of $15B. so given the math: upside greater than $15-20B (with some potential for being worth a good bit more), and the downside having a floor at $5-10B, then if i'm Mr. Zuckerberg i'd be patient on taking any deal that's only a slight premium to the most recent 'valuation' of $15B. don't know if that's the calculus going on inside Facebook or with any of their VCs, but my guess is they're playing for a bigger payday and they're willing to stay in for a few more hands of poker ;) my $1.02, upside on him waiting: Facebook really hasn’t hardly dipped a toe in the water on monetization features, and there’s tremendous reason to be optimistic for better performance over next 1-3 years (within the timeframe they’d need to either consider IPO, selling, or raising more debt/equity capital). regardless if any of this works, the ceiling certainly feels like it would be north of $15-20B. so unless the MSFT deal is substantially closer / higher than that, my guess he defers for at least a year or more on pulling the trigger.

downside on not waiting: possible that growth could crest (or even wane), monetization features don’t work out / don’t bear much fruit, or that other players (Google, LinkedIn, MySpace, other newer startups) figure out a better mousetrap. however, i don’t think the downside means Facebook = zero value, it might just mean that the floor is $5-10B instead of $15B.

so given the math: upside greater than $15-20B (with some potential for being worth a good bit more), and the downside having a floor at $5-10B, then if i’m Mr. Zuckerberg i’d be patient on taking any deal that’s only a slight premium to the most recent ‘valuation’ of $15B.

don’t know if that’s the calculus going on inside Facebook or with any of their VCs, but my guess is they’re playing for a bigger payday and they’re willing to stay in for a few more hands of poker ;)

my $1.02,

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