Bebo, Foursquare, Zynga and the Catwalk Tango.

Breathless News Today! Foursquare to be sold to Yahoo for $100 million and Zynga is apparently worth $5 billion.

Foursquare:

A report surfaced today that Yahoo is considering buying Foursquare for $100 million. The story, put out by Silicon Alley Insider, seems pretty preposterous, considering Foursquare is the hottest name in location-based services and currently has four top VCs all looking to invest in the company. So why would Foursquare founder Dennis Crowley possibly be considering selling his company to a troubled Internet giant? (Venturebeat)

Why Indeed - but before looking at that, here is Zynga with an even- better-order-of-magnitude claim:

Zynga, the leading social-gaming company behind Facebook hits such as Farmville and Mafia Wars, would likely be worth as much as $5 billion if it were publicly traded instead of privately held, according to SecondShares.com, a group of former equity analysts who spend their time researching the value of private online companies such as Zynga, Facebook, Twitter and LinkedIn. SecondShares based its estimate of Zynga’s value on the number of outstanding shares, estimated revenue per user, growth rate and other metrics, and projected that by 2015 the game-maker could have a theoretical market value as high as $10 billion. (GigaOm)

So what is the common factor? Well, it was best put by VentureBeat covering the Foursquare story

Translation: Foursquare’s bankers are hoping to push the four venture capital firms said to be interested — Accel Partners, Andreessen Horowitz, Khosla Ventures, and Redpoint Ventures — into raising their bids from the currently rumored $80 million valuation by scaring them with the notion of a sale to Yahoo. (Or perhaps sustain their interest: Redpoint reportedly dropped out of the bidding last week.)

An $80 million valuation now would imply a much higher valuation on sale. So the notion of selling to Yahoo, famed for killing the cool Web companies it acquires, for a mere $100 million, seems ridiculous on its face. Especially when you consider that Crowley has already sold the same idea of a location-based friend-tracking service once to a big Internet company, Google, and saw it fade away to obscurity in the Googleplex.

And given that the guys valuing Zynga are - to quote "former Merrill Lynch and Goldman Sachs equity analyst Lou Kerner, former Sanford Bernstein research analyst Eli Halliwell and Gamers Media CEO Jay Gould" one could just - just - make the argument that the parties may have a certain selection bias, no? Move over Henry Blodgett! (Oh wait, he runs SAI which broke the Foursquare story.....all is explained )

At times like these its worth taking a strong pinch of snuff, or salt, or something that can return us to earth. So how about Remembering Bebo.

Do you remember Bebo?

It was sold, amidst much fanfare, at the absolute height of the Social networking Hype Bubble, to AOL for $850m in Cash in March 2008. We and many other more sanguine folk (including some in AOL) said they were nuts (see our satirical take on this at the time). And today, 2 years after, come the inevitable consequemce - its on the block:

Bebo’s pricey $850 million acquisition in March 2008 happened because then AOL-Time Warner (NYSE: TWX) CEO Randy Falco and president Ron Grant were seduced by Bebo president Joanna Shields - not just on social networking (Bebo barely had a profile in the U.S.) but on the vision Shields was already laying for a social media company. AOL picked Shields to run one of its three divisions, People Networks, buying up SocialThing and leading a strategy to stitch together AIM, ICQ, Bebo and more as social became the strategy du jour...

Some say it was a crazy decision from day one. Indeed, it ended abruptly with AOL’s decoupling from Time Warner and with the arrival of new CEO Tim Armstong, for whom ad-funded content is the way ahead. The writing was on the wall when Shields exited and Bebo was parked in a new AOL Ventures unit.

Of one thing you can be sure - it won't be sold for anything like $850m!

So, next time you hear of the latest New New Thing being worth Bazillions, Remember Bebo! and The Lessons thereof:

- Its not worth that
- but there is someone who may believe it is, especially if enough people say it is.

Which brings me to the Catwalk Tango element. I was talking to a friend last week about how the Fashion industry de-risks itslef. Planning is done up to a year in advance of a fashion season and its very unclear which fashions will sell in the season, so the Great Houses cabal together to get some sort of common view of the season 6 months hence (reduces risk and cost you know), and then via catwalk showings get their marketing arm (aka the fashion journalists) to start writing breathless prose well in advance to soften up the buying punters so they are in a frenzy when teh fashions hit the stores.

Perish the thought that this dance of the seven veils could happen in Tech Startup Selling