How much are social networks worth?

Much of the social-networking talk in Silicon Valley and on Wall Street last week centered on speculation around buyers, sellers and eventual IPOs. Deja vu, circa 1999.

But as the media, VC firms and even the occasional individual wondered aloud about courtships involving YouTube, Facebook, Yahoo and others, one social network ventured well beyond the rumor stage and actually went public--on the other side of the world.

Mixi, which translates loosely to Japan's version of MySpace, ended its first full week as a new issue on the Nikkei market after a highly successful debut that made its 30-year-old founder a billionaire. And while the 5 million-member Mixi is much smaller than its Western counterparts, many handicappers couldn't resist extrapolating values for other social networks based on its numbers.

Mixi's shares doubled on the first day of trading, making it worth an estimated 222 billion yen, or roughly $1.9 billion. What does this mean for U.S. social networks? A lot or nothing, depending on whom you ask. Based on revenue projections and other factors, Forrester analyst Charlene Li wrote, "A rough back-of-the-envelope would value MySpace's 100 million users at $20 billion and Facebook's 7.5 million users would be worth $1.5 billion."

If that's anywhere near accurate, rumored Yahoo offers of $1 billion or $1.5 billion for Facebook could have been pretty close to a fair offer. Or not.

As we found out in the spring of 2000, any kind of estimate can be pulled out of thin air. Mixi's fate, in fact, isn't necessarily a reliable gauge of financial prospects for social networks in other parts of Asia, let alone the United States.

Still, comfort can be taken in at least one aspect of the IPO: It went up. And after the last six years in this business, that's nothing to take lightly.