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Friday, April 04, 2008

Don't Overvalue Craigslist

Henry Blodget, the infamous dot.com hypester, is at it again, this time proclaiming that Craigslist might be worth $5 billion.

Blodget, who ran afoul of the SEC during the dot.com boom, busts out another lofty prediction that is a tad shy of reality.

He poses a hypothetical scenario about partially monetizing craigslist with advertising and expanding the listing fees, but assumes a similar ratio of cost to profit from the current tight-fisted operation that doesn't scale well in reality. Sure, a commercial craigslist would be worth a few hundred million in its current form, but many users would leave as the monetization begins.

This type of dangerous hyping is what led us to the last crash, and Blodget is already too late as the economy is already in the crapper.

By John Gartner at 11:49 AM | Comments (0)

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