Valuing Companies By Page Views
There have been many reports these days that tie the value of companies to the number of page views they generate. Case in point, Steve Rosenbush at BusinessWeek today ran a story that Facebook is seeking to sell themselves for $2 Billion on the fact that they are the 7th largest Internet site based on Page Views.
Aside from all of the dot-com-bust memories (nightmares?) that this brings back, there are two fundamental problems:
1. Page Views do not equal revenue. Unless, of course, you make all of your money from impression-based advertising, but that would be very dot-com-bust-like (not to mention, who likes banner ads?)
2. Page Views do not equal actual usage. It creates the wrong incentive for good user experience. More pages to complete a task is a bad thing. Which is why, page views do not equal users either.
Bottom line: when we launch our service this spring, we're shooting for fewer page views. You better be able to find and lease your new apartment in the fewest clicks possible. Let's keep our eye on the ball.
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3 Responses to “Valuing Companies By Page Views"
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March 29th, 2006 at 8:16 am
Is there a stock symbol for facebook?
March 29th, 2006 at 10:48 am
No, they are a privately held company.
May 2nd, 2006 at 8:15 pm
I haven't heard of sites being sold by page views, but I definately have heard of sites being valued by monthly unique visitors, and this makes some sense to me.
Traditional advertising doesn't work like it used to and advertising dollars have been shifting online for years…..which, of course, paved the way for ILS services like mynewplace in the first place.
Even Google started as a service with no revenue model. Now, they make about $50 per year per visitor.
If you control the traffic, you control the conversation. If management knows what it is doing, the money will follow.