Data is Free

This acquisition boils down to one thing: data. The ability to understand and predict consumer purchases is the new coin of the realm. Microsoft valued Ciao's 26.5 million monthly uniques at $18.34 each.

To put that into some perspective let's look at what wireless providers have paid for subscribers (and the monthly cash they spin out).

• In July 2007, Verizon paid $2.67 billion for Rural Cellular's 700,000 subs: $3,800 per sub
  
• In August 2007, T-Mobile paid $2.4 billion for SunCom's 1.1 million subs: $2,100 per sub
  
• In November 2008, ATT Wireless paid $944 million for Centennial's 1.1 million subs: $858 per sub

In my next post we'll look at the value of these subs given some fairly reasonable assumptions regarding churn, lifetime customer value, and the operating margin of the businesses. The goal is to see who made the better deal.

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