Every question becomes like pulling teeth. And thats why, with young startups, people give up. My suggestion is, rather than give up,make your best estimates. Dont put the weight of the world on your shoulders,saying, I have to be right. You cannot be right, but you can still make estimates. For the last four years, every timeyouve had a big IPO come up, the week before the IPO,Ive tried to value the IPO.
The reason I do it the week before the IPOis, if you wait until the IPO is priced,that number starts gnawing away at your brain. So when you do a valuation, your numberstarts to wander toward that number. So this is actually a valuation I did of Twitter, the weekbefore their IPO. So what triggered this was, I was on CNBC. So once in awhile, I end up in that insanity. And I was actually we were talking about Twitter. And theres an analyst there who was very optimisticabout Twitter.
So I said, why do you think Twitter is worth so much?He thought it was about $ or $ per share. He said, because the online advertising business is huge. So I said, how big is the online advertising business?He said, I dont know, but its huge. This is exactly what gets us into trouble. People dont want to talk its like China.
Online, its huge. And because its huge, I can pay whatever I want. So I said, you know what?If I want to value Twitter, thats where I need to start. I need to figure out how big this business is. Doesnt take a whole lot of research to figure this out. But the entire online advertising business in was about $ billion. Thats the whole global online advertising business. The biggest player, by far, is Google. And if you look at the breakdown, you can see,Google is about % of the global online advertising. Read More: www.valssa.com.au