The Facebook versus YouTube question

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Robert Scoble has ignited quite a discussion over the respective values of Facebook and YouTube, which Google acquired this week for $1.65 Billion. He argues that YouTube is worth more in part because of all that use it. Facebook has a smaller following. Don Dodge takes a different approach as he scribbles out the numbers and comes to the conclusion that Facebook is worth more.

Which argument is correct?

Is Facebook worth as much as YouTube? To me, not even close. Is YouTube overpriced at $1.65 billion? Yeah, I think it’s way too much, but then again in the broader picture Google wins with this acquisition. Financially, Google has the best opportunity of leveraging potential revenues from the video community. In the competitive landscape the acquisition also serves to psych out its competition. People ask, how can they do that? How can they be so crazy? But then if Google is able to keep YouTube going and growing as it has been, then the naysayers will quietly take a seat in the back of the room and let Google’s rise continue. Or worse yet they get psyched into purchasing a lesser valued company for even more money in hopes of competing at the same level. If you’re looking for growth, both are non-winning opportunities. That’s the issue.