“We’re excited about building this company,” said Nye. “It would take a helluva lot to get us off that path.” Does that mean $1 billion? “A lot more than that,” said Nye.
OK, we’ll play. How much more? $2 Billion? $3 Billion? Not one penny less than Facebook’s $15 Billion? If News Corp is really the buyer here, we imagine there will be a major gulf between how Murdoch and Nye define “a lot.”…
Dan tells Fortune that LinkedIn’s on track for $75 million to $100 million in revenue next year. It’s at 200 employees, so at that run rate, it ought to be considerably profitable. Facebook, of course, is putatively worth $15 billion, and is double LinkedIn’s size — it’s supposed to be profitable on revenues of $150 million. No one except Microsoft seems to believe Facebook’s $15B valuation, so let’s trim that down to $10 billion, and give LinkedIn a 50% discount.
So how does $5 billion sound? By Facebook/Bubble 2.0 standards, that number seems plausible, and we can see Dan and company explaining why LinkedIn’s professional users are much more valuable than the kids doing keg stands over at Facebook, so $5 billion would really be a bargain! (Sidenote:SV VC Greylock has stakes in both companies)
Except — Rupert Murdoch just paid $5 billion for all of Dow Jones, and no other suitor made an offer anywhere near that range. Hard to imagine Rupe — or any big media buyer — actually telling shareholders that the new social networking site he’s bought is worth as much as the world’s best newspaper (plus Factiva, Marketwatch, et al).
So let’s trim it down again, using a different set of Facebook comps:
At $15 billion, Facebook’s 55 million users are worth $272 a piece. Again, let’s knock the $15B down to a more believable (but still generous) $10B, which makes them worth $181 each.
At that rate, LinkedIn’s 17 million users mean the company would be worth $3.1 billion. We like this one, both because it’s meets both the “Helluva Lot” and “A lot more than $1 billion” criteria that Dan has laid out. More than that, it’s a doable number for a lot of bidders. Dan?