- Reuters, Friday, September 22, 2006 11:45 AM
YouTube and Facebook, two of the Web's hottest acquisition targets, are overvalued at $1 billion, says Time Warner CEO Dick Parsons. For media companies seriously looking to acquire one of these
Internet sensations, they would need to take a "big leap of faith" to pay current valuations, Parsons said in an interview. "Valuations put on those businesses that currently make no money are
astronomical." Ever since News Corp. took MySpace for $580 million last year, traditional media companies have caught the acquisition bug. Instead of building new online services, they've decided it's
more cost-effective to buy their way into online media. Well, not at $1 billion, says Parsons. Time Warner (and its shareholders) may not be willing to part with that kind of cash at the moment, but
Internet giants like Microsoft, Google or Yahoo may. In fact, the latter is said to be close to acquiring Mark Zuckerberg's Facebook for approximately $900 million.
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