Facebook, Twitter, Linkedin: Are they worth it?

IPOs are back in the reckoning. And this time it’s none other but Uncle Sam that’s the epicenter and the boys raising the bars are from the dot-com business. With most of them having or claiming to have gained the critical mass (for the much abused “network effect”), it’s not a surprise that the valuations are simply going through the roof. The four of the biggest newsmakers are Facebook, twitter, Linkedin and Groupon. Though likes of Skype, Zynga, Yandex (Russian search engine), Pandora (music streaming company) etc. have been in the news as well. 

So, what’s the fuss all about? For that let’s have a look at the user base, revenue and the predicted valuation for some of these tech firms.

Firm	User Base	Revenue	Profit/Loss	Valuations
Pandora	90 m	$51m	-$6.8m	$4.2bn
Linkedin	100 m	$243m	$15m	$8.9bn
Zynga	279 m	$942m	$47.2m	$15-20bn
Facebook	700 m	$4bn	-	$100+bn
Twitter	300 m	$100m	-	$7.7bn
Groupon	83 m	$713.4m	-$389.6m	$20bn

Bonds and Bonding

Have you ever tried to find out what similarities do the financial instruments have with our day-to-day activities? Some might be wondering for the logic behind this question whereas some might say that it’s too obvious as the instruments are meant to take care of our day-to-day financial needs depending upon our incomes and risk taking capabilities. Let me put a more specific question; what are the similarities between Fixed Income instruments and relationships in real life? Before you start guessing let me simplify the task by defining the two terms. By fixed income instruments, I mean those financial instruments that help you earn low but fixed returns on your investments thereby reducing your risk. The most well known example is bond. On the other hand by relationships, I mean those existing between a boy and a girl or a man and a woman. I am counting out those arising out of family ties, friendships or those existing between same sexes. In better words let’s limit ourselves to those relations that might culminate into marriages.