Nisan Gabbay of Silicon Valley VC firm Sierra Ventures has started up an interesting new blog called Startup Review, which aims to profile Web startups from a business angle. Here's how he put it in an email to me:
"Startup Review will feature weekly, in-depth case studies on successful Internet start-ups. The companies profiled will have achieved either: a) significant exits, b) large revenue, and/or c) strong Internet brands."
His first profile is of craigslist, which he claims could be worth around $2.4 billion - if Craig Newmark wanted to sell (there are no indications he does). Nisan notes:
"Assuming they could make $200M in revenue at a 40% net margin, and applying an Ebay-type EBITDA multiple, that would place the value of the company at ~$2.4B. I have no doubt that if Craigslist were to sell, it could command more than a $1B purchase price as is today, and probably significantly more (Note: Craig is a better man than I!)
eBay would be the most logical acquirer, given that they already own a 25% stake through a rather dubious stock sale by a former trusted employee of Craig’s."
There's been a bit of talk about Facebook.com and YouTube asking for over a billion to be acquired, so by that measuring stick craigslist would certainly be at that level of value too.