Not too long ago, there was a lot of hubbub about a possible Yahoo-Facebook deal (which never happened). There were also a lot of questions about how Yahoo perceived the social networking site. A leaked “Ad Revenue Assumptions” sheet has given a glimpse into the company’s thought process; it also turns out that the buyout plan was named “Project Fraternity” – draw your own conclusions.
Arrington politely observed that “these revenue projections are based on robust user growth. By 2010, Yahoo assumes Facebook would hit 48 million users, out of a total combined highschool and young adult population of 83 million.” That would represent a market penetration of about 60%, which seems terribly optimistic when compared to the site’s 2005 numbers (6.2 million registered users and 8% market penetration).
Fred Stutzman identified another potential problem with the document: “The footnote reads ‘Page views/users based on active users which assume 92% of avg registered users are active users.'”
“The part you want to pay attention to,” Stutzman continued, “is the second half of the sentence – Yahoo is statically predicting that 92% of Facebook users will stay active in the site over time. Oh – and the definition of active isn’t just keeping an account and checking messages once a month, it is generating an average of ~900 page views. That’s really active.”
Given these, um, “oddities,” quite a few people feel that Mark Zuckerberg, Facebook’s founder, should be kicking himself over not accepting Yahoo’s offer. Those kicks shouldn’t hurt too much, anyway – Rex Dixon (repeatedly) notes Zuckerberg’s affinity for open-toed sandals.
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Doug is a staff writer for murdok. Visit murdok for the latest eBusiness news.
