I have no idea what the folks at Fox Interactive put in Jordan Rohan’s drink but the RBC Capital analyst came away from a Tuesday meeting convinced that MySpace.com could be worth $15 billion to News Corp. within a few years. In a note to clients, via Reuters, Rohan said after meeting with FIM execs he decided “media investors may not fully appreciate what has already been done with MySpace or what may lie ahead. $15 billion in a few years? It is possible.”
He acknowledges that it’s audacious to suggest that the company could achieve that but said it was based on “raw, unprecedented user/usage growth.” Internation growth prospects are important,
— He said MySpace is developing a mobile app to be launched in 3-4 months on a major U.S. carrier.
Rafat adds: I’ve managed to get a hold of the report. The analyst uses a couple of ways to arrive at MySpace’s valuation: one of it is by comparing it to Google. “In 2002, Google reported revenues of $435 million, on par with the revenue run rate anticipated for MySpace and its sister properties at FIM over the coming 12 months. Google went public with a $25 billion valuation in August of 2004, and proceeded to quadruple in 18 months. So what was Google really worth in late 2001, staring ahead at revenues of over $400 million? A discounted value analysis would place Google’s value at over $11 billion using a 30% discount rate and the $25 billion IPO valuation three years hence. Google is the exception, not the rule. But a 30% discount rate anticipates a very high risk of failure.”