What is it using to come up with the prices?And I drew on statistics to answer that. All I did was a correlation between the market capand different variables, to see which one had the highestcorrelation with the market. So what is it that makes some social media companies valuableand the others not?And you could look across the correlations. And by far– look at the correlation.
The most critical variable in explainingthe market value of a social media companyis the number of users. I’ll give you a very simple way to value social media company. Here again, you can save yourselfthe trouble of hiring a banker. You tell me how many users you have. If you go back to the previous page,the market is paying about $ per user. You tell me how many users you have. I’ll tell you what your value is going to be in the company. So how many users does Twitter have? million. million times is $ billion. Click here:www.sydneypropertyvaluation.com.au
We’re done. Who cares about cash flows, growth, and risk?Facebook is billion users, million users. They wish they had billion. What planets are you going onto?. billion users– you multiply that by . You get $ billion. And remember last year when Facebook bought WhatsApp?How many of you have WhatsApp on your phones?How many of you pay for your WhatsApp?That settles my case, like one in five people. In fact, last year, when they bought WhatsApp,the paid $ billion for the company. $ billionseems to have rounded up to.
Don’t ask me how those things happen. It’s just a couple of billions anyway. I got a call again, saying, how do you– for some reason,people think I have to explain what other people do. How do you explain what Facebook just did?And I said, you’re missing the point. Facebook is not buying WhatsApp for the earnings, the cashflows and the revenues. What are they doing?AUDIENCE The users. ASWATH DOMODARAN How many users did WhatsApp have?Like million.