Utopia: If France Decides To Create Its Own Facebook

I am always skeptikals when I see some web 2.0 companies valuation. Indeed, some of these companies have not sold anything yet, but investors spend billions into it. Most of the time these evaluations are based on the number of users one company have, as investors are counting on the audience to sell advertizing space, either it is keywords, banners, sponsored articles, or "promoted Tweets".

Here is some of the valuation I found:

LinkedIn is worth $2 billions

Facebook $33 billions

Twitter $4 billions, even though they are still loosing money

Myspace was bought in 2005 for $580 millions

These are some of the examples I found.

A lot of people are scared about how big Facebook is getting. Indeed, Facebook is the ultimate social network, which allows you to find all your friends, chat, share pictures... And people are affraid about losing the control of their private life on the web to a private company. I understand it may be scary. This is the reason why some projects like Diaspora emerged. They are willing to create an open source social network to compete with Facebook.

Now I wanted to share with you another idea of mine. Let's imagine for a moment that France decides to create his own social network, and to use the full potential of the long tail.

There are 60 millions of French persons in France, and about 40 millions have a regular access to the Internet. Let's imagine all of them decides to invest in a Facebook-like company, investing only 20€ in it. You will have a company with an equity of 800 millions €, and if you translate it into US dollards, it would be over $1 billions.

Now let's consider a ration between the number of users and potential advertizing revenues:

Facebook: 33 billions for 500 millions users: $66 by users

Twitter: 4 billions for 200 millions users: $20 by users

LinkedIn: 2 billions for 70 million users: $28 by users.

If we really think about it, with $20 invested by 40 million of French people, we would be able to have a tycoon of the Internet of our own.

Of course, this is pure utopia, but I just wanted to show two things:

• Valuation of companies just based on the number of users is dangerous. You may not sure that your website will turn into a highly efficient advertizing platform, Like Google accomplished.
• There is some money in France, and I don't understand why people complain we are not able to finance interesting start ups.

What do you think about it?