Thursday, February 13th, 2014

Are Twitter, LinkedIn And Facebook Worth Anything?

That chart above went around a bit last night, with the news of the purchase of Time Warner by Comcast for $45.2 billion. It compares the "market value" of LinkedIn, Twitter, Facebook and Google v. the "market value" of CBS, Viacom, Disney, Comcast and Time Warner Cable. You know, the new establishment v. those stupid old dinosaurs. Hmm, how else could we compare these companies?

Oh right, how about by that crazy out-of-fashion metric: by the money they make? I made you a chart! Here's that "Social/Mobile" category on your left and the "Traditional Media" on your right.

And this is Q4 2013 revenue only. Basically, the total revenues of those old dinosaurs ($37.7B) were about double the revenues of the digital/social companies ($20.1B)—and that's only because Google is included, which is a real business, bringing in a whopping $16.6B of that share. (About as much as Comcast, which is fascinating.) Time Warner made more than LinkedIn, Twitter and Facebook combined.

So yeah. To put the Time Warner-Comcast deal in perspective: THEY HAVE MONSTER BUSINESSES with an ASSLOAD OF MONEY FLYING AROUND.

Mighty Facebook, to its credit, had revenue of $7.87 billion in 2013 all told. Of course, then you realize it's just an advertising delivery platform. In the fourth quarter, $2.34 billion of their $2.59 billion quarterly revenue was from advertising. It has, essentially, no other business income.

Meanwhile, Comcast had revenue of $64.7 billion in 2013 (and $8.5 billion in free cash flow). So they're getting Time Warner for like, nine months of their earnings.

Other companies, in comparison, basically don't even exist. Twitter, for one, had 2013 revenues of $665 million, with a full year net loss of $645 million.

7 Comments / Post A Comment

Lockheed Ventura (#5,536)

Facebook's ad revenue is heavily reliant on bots and click-farms. This video does a good job of showing how click-farms hurt Facebook users, but enrich Facebook.

Methamphetadream (#235,611)

And this is why valuation is done using a number of factors, not just revenue alone.

riotnrrd (#840)

Thank god Comcast is getting more power and money. That beloved, scrappy little start-up needs all the help it can get to compete!

Nick Douglas (#7,095)

Of course, switching metrics also doubles down on the unscientific nature of the first graph's cherry-picked choices. Apple's $37.5 billion in Q4 2013 revenue alone is a mere $200M under the combined total for those top 5 old-timey elderlysaurs. Surely they count as a significant contributor to the shift in entertainment dollars from one screen to another. And where does AT&T fit in?

Freddie DeBoer (#4,188)

@Nick Douglas Yes, but that doesn't change the basic fact that Apple has an ancient business plan– make products and charge people more to buy them than you paid to make them. That is very different from Twitter's business plan, which is to sell ads, in a brutally competitive online advertising environment, and to sell "analytics" like all the kids these days want to do, which are totally unproven to be of much use to the people who buy them.

Niko Bellic (#1,312)

Ahem. Revenue is not equal to "money you make". It's not equal to earnings either. That said, I agree that LinkedIn and Twitter are worthless (while Facebook is standing on stilts made of glass), and that the companies that own the physical infrastructure that delivers the broadband internet basically own all of us.

AbigailHolt29 (#260,473)

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