These Aren’t The Companies You Are Looking For – Company Valuation

A VC friend emailed me the following question(s) a few weeks ago:

The rumor this week regarding Yahoo acquiring Digg for $30M sparked a discussion here around company valuation. The discussions revolved around the key factors in valuing an early stage web technology business and how these factors are being evaluated by investors today. For example, would Yahoo or other companies be buying the technology? Are they buying subscribers? Are they buying a brand or is it a weighting of a number of these factors? Based on what you are hearing, how would Digg, Technorati, livemarks or another consumer internet business be both evaluated and valued today?

Remember the Jedi Mind Trick that goes as follows:

Stormtrooper: Let me see your identification.

Obi-Wan: [influencing the stormtrooper’s mind] You don’t need to see his identification.

Stormtrooper: We don’t need to see his identification.

Obi-Wan: These aren’t the droids you’re looking for.

Stormtrooper: These aren’t the droids we’re looking for.

Obi-Wan: He can go about his business.

Stormtrooper: You can go about your business.

Obi-Wan: Move along.

Stormtrooper: Move along… move along.

Full Story: http://www.feld.com/blog/archives/2006/02/these_arent_the.html

(Thanks to John Masterson of Modwest.com for passing this along. Russ)