Question

How would you value AdMob at the end of 2009?

1. As a stand-alone firm by filling in the following table. AdMob's Nov.  2019 revenue was estimated to be 60million. This suggests that Google's offers price for AdMob is a multiple of 12-17 times. AdMob was acquired for $750million.

2. As an acquisition target

Answer 1

Since AdMob currently is a high growth start-up which is focused on expansion and not too much on profitability right now, using a DCF apporach or operating multiples like P/E or EV/EBITDA would not make sense as most of their operating metrics will be negative

So the best way to value such firms is using the Price/ Sales multiple

We will see what the industry standard Price// Sales multiple is, adjust it according to the context for AdMob and then arrive at the final valuation