Infographic Category Social Media

Over-Valued Social Media Companies

By | source: May 27th, 2011

Social media companies have always been valued much higher and much quicker than most other industries. I believe this is because of the sheer number of users on these sites. Although there isn’t anything to sell these users, just their presence builds value.

This infographic talks about a company called Color. Color raised over 40 million in funding without any revenue or users. This is something new in the social media realm. Before a website ever received real funding it would always need to build a user base. Now a good social media idea is all you need for 40 million bucks.

I believe the strategy of these investment firms is to build up these companies value, and contribute to over-valuing them, until a big gun like Microsoft or Google buys it up for billions. Hey, it is a good strategy. Building users is easy when there is millions of dollars to make a free site better.

Linked-in just went public and the market when crazy for it. Think about it if Facebook pulled that. Facebook has made it clear they want to be a forerunner in the tech industry. This is looking like a great way to do that. [Via]

infographic world

Similar Infographics

how amazon makes money

How Amazon Makes Its Money

Apr 24,2018 added by 4.8k Business
Worldwide richest tarders

Can Trading Make You Rich?

Apr 7,2018 added by 2.9k Finance