Tuesday morning's WSJ ran a front page story discussing the potential investment in Facebook by MSFT. The article also included a table which compared the number of unique visitors Facebook had in August versus the top ten Internet websites. The table reminded us of an old metric analysts used to use in valuing Internet stocks -- value per eyeball. For fun, we decided to blow the dust off this indicator and see how it applies to the top Internet websites today.
For each company on the list whose business is based solely on the Internet, we calculated their valuation per eyeball based on their August traffic and most recent market cap (Market Cap/August Unique Visitors/2). Based on the WSJ article, Microsoft's investment in Facebook could value the company at $10 billion or $72.15 per eyeball. While this may seem like a lot, Google's (GOOG) eyeballs are valued at over twice that ($158.26). While Facebook's eyeballs are less valuable than the eyeballs of AMZN and EBAY, they are worth nearly twice the eyeballs of YHOO and over fifteen times the eyeballs of CNET. Who knew tech geeks were so unpopular?
