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Comment by jmduke | Hacker News Reader

For comparison: Marriott International is valued at $22B. In 2013, Marriott employed 199,929 workers and made $626M profits off of $12.78B revenues.

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Airbnb's valuation seems totally irrational to me, given the nature of their business. Still, I would think any business would like to double their valuation in a year.

Mariott should convert all of their hotels into apartments, fire all of their staff, rent the apartments, and then have those people rent the apartments to other people via mAIRiottBNB.com. Boom, instant market cap doubling.

Is market cap really the only objective?

No, and doing that would ultimately destroy Marriott's business. I think Airbnb's investors would be wise to think about that.

Here is the thing, in the 90's people would look at Amazon.com and be amused, mystified and scandalized by what the company was valued at, when compared to giants like Borders or Radio Shack, with so many more employees/stores/etc. Turned out that intuition was wrong, and Amazon's way of doing things completely overtook the brick and mortar way not only in books and electronics, but for pretty much every product category.

Then again, people probably thought the same way about Webvan vs say Safeway, and they were absolutely right in that case.

So, here is the question, is AirBnB an Amazon or a Webvan? Is Marriott a Borders or a Safeway?

The valuation thing is silly, but there are many silly things around, so why just bother with that and not something else?

But the fact that a company with ~ 50 employees (not talking about AirBNB but generally about the IT sector) generates a revenue comparable to a company (in the 90s or 80s or 60s) with 500.000 employees is a very real problem. If the modern society doesn't make to overcome this somehow, I see dark times ahead.

Airbnb does have hundreds of thousands of hosts that are getting some of the revenue too. Looking at gross receipts double counts and doesn't make too much sense in sounding the alarmism.

> Airbnb does have hundreds of thousands of hosts [...]

Not sure if we're in the same page here: An "AirBNB host" and an "employee" are not the same thing. If you think that they are, then the problem I was trying to describe is deeper than I thought.

My point was you are looking at gross revenue, when they are really a booking agent, so they only get about 3% of that revenue after reimbursing hosts. Hosts do the cleaning, service, etc. that makes up the bulk of the 200,000 employee number for Marriott.

If you want to compare net profit instead of gross revenue and say it is sick, I don't think the 200,000 employees would care, since their pay subtracts from Marriott's profit.

That's a bad comparison. Marriot is hugely leveraged [1] on purpose (tax shield reasons, etc. etc.), while Airbnb isn't.

It would be better to compare the firm values instead of equity values (which you can change in one day just by issuing debt and using the proceeds in a share repurchase)

[1] http://marketrealist.com/2014/10/why-ev-ebitdar-multiple-bes... Apparently they do a trick to put most of their debt off the balance sheet, through lease obligations. Thus, if you just do a quick glance at their numbers, they appear to have a low leverage.

Go back to business school my friend. Hacker news is no place for your kind

Hacker News is a fine place for anyone who posts substantive comments, like zzleeper.

What it has no place for are personal attacks. Since this account has done so more than once, we've banned it.

Anybody with a banned account who would like it to be unbanned is welcome to email us at hn@ycombinator.com. We're happy to unban users who give us reason to believe that they will follow the HN guidelines from now on.

Article says they're raising a billion dollars. The question isn't whether $1 billion is a good price for 5% of the company, it's whether $1 billion is a good price for 5% of the company, liquidation preferences, and any other special rights.

With hosts in 34k cities (from article), airbnb probably has more employees if we classified hosts as such. Also, many hosts hire of cleaners. It's quite possible that ~500k people are earning income (directly or indirectly) related to airbnb bookings.

And how can you classify someone (who works 40hrs in a real job) who rents out their backroom on a weekend as "an employee" comparable to the likes of Mariott et al?

I'd say they're far better off than employees.

Says no one who ever needed a job to pay their bills.

What does Airbnb's revenues look like?

That's not fair at all, AirBnB has that giant real estate portfolio it owns that it could sell off if needed. That's real value there.

I think I'd take the $300m in profits on $600m (both wild guesses) in revenues and growing very rapidly with only a few thousand employees.

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