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How to Make a Billion Dollars in Your Underwear

Posted By Robert Gorell On October 30, 2007 @ 3:28 pm In Advertising,Blog Buzz,Entrepreneurship | 10 Comments

plentyoffish.comA few months ago, we blogged about Markus Frind [1], a lone entrepreneur and founder of the popular dating site PlentyOfFish.com [2]. On a panel interview with Guy Kawasaki (watch it here [3] if you’ve got 30 minutes), Markus claimed that he was his only employee, and that he basically spends a couple hours each day maintaining the site — that’s it — in his underwear.

Fast forward to yesterday, when Read/Write Web‘s Richard MacManus caught up with the entrepreneur [4], who’d just hired his first employee. Apparently, the site may now be worth a billion dollars — billions, maybe. (And hey, if Microsoft thinks Facebook’s worth $15 bills, why not?) Says MacManus:

Markus told me that per page view, Plentyoffish has 5-10 times the click through rate of Facebook. So by his calculations, POF’s 1.2 Billion page views per month is the same as 5-10 Billion Facebook page views per month. Facebook “only” generates 40 billion page views a month and yet it has a $15 Billion valuation. But the crux of Markus’ argument is that despite having about 33 times the monthly traffic of POF, Facebook’s poor click-through ads should bring the valuation models closer. Markus said that “over 40% of Facebook’s pageviews are image related, ads in bad positions and users just generally looking to waste time.” He said that “there are only a handful of sections on the site [Facebook] that will generate good click thru rates for advertisers.”

So getting down to nitty gritty metrics, Markus concluded that “Facebook is only able to generate 10 to 15 times as many clicks on ads as my site and it’s valued at 15 billion. Needless to say I’m watching ad supported business model valuations very closely.” What’s more, some of his direct competitors – e.g. Eharmony and match.com – are apparently valued in the billions.

Kind of amazing how a cheap-looking site with virtually no overhead, aside from server costs, can be worth billions.

Whether or not you believe in these fishy valuation schemes, it’s still pretty cool, isn’t it?  Here’s a guy who’s only invested in the things his business requires.  Oh, and he’s clearly more focused on ROI than his competitors.

Article printed from Conversion Rate Optimization & Marketing Blog | FutureNow: http://www.grokdotcom.com

URL to article: http://www.grokdotcom.com/2007/10/30/how-to-make-a-billion-dollars-in-your-underwear/

URLs in this post:

[1] blogged about Markus Frind: http://www.grokdotcom.com/2007/06/27/guy-kawasaki-on-making-5myr-in-your-underwear/

[2] PlentyOfFish.com: http://www.plentyoffish.com

[3] here: http://blog.guykawasaki.com/2007/06/no-plan-no-capi.html

[4] Richard MacManus caught up with the entrepreneur: http://www.readwriteweb.com/archives/plentyoffish_one_billion.php

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