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Want to Buy Facebook? 20 Bucks And It’s Yours

A Swedish couple has built a platform for virtually trading 21 of the hottest companies on the Web, including Google, Twitter, Foursquare, Amazon and and Groupon.

Gigapie launched today, with Facebook priced at 200 credits, or $20. Flickr is 100 credits. AOL is 110 credits. Prices are based on demand for the company and the amount of traffic it gets. You can cash out via PayPal once you earn 500 credits.

The site combines elements of stock trading, predictions-based trading and fantasy football. It could be an interesting and useful site if it had been executed differently, but I don’t see it catching on in its current incarnation.

The way it works is simple. You’re trading whole companies, not shares, and owners have to sell to anyone who wants to buy. The price goes up 10% every time someone buys a company. That means the value goes up a dollar with every transaction, threatening to drive prices up too high, too quickly.

The value of a company is also affected by site traffic as estimated by Compete.com. We’re skeptical whether Compete can measure traffic accurately enough to register fluctuations for eBay, Reddit or any of the other A-list sites often enough to reflect the company’s real life popularity.

We bet there would be demand for a well-executed site where people could bet on tech companies for a lower cost of entry than the stock market. It could be an outlet for all the fanboys and girls who can’t afford to buy Apple at $270 a share, for example. A company’s virtual value could become a credible metric for how it’s doing, just as the predictions trading on Intrade.com has become a pretty reliable indicator of election outcomes thanks to informed citizens betting on candidates.

Geeks who read Techmeme every morning and posses encyclopedic knowledge of the latest trends already prognosticate about who’s coming up, who’s going to fold, and who will flub their next launch. (Idea: A virtual stock exchange for startups!) Why not turn that intelligence into money?

Gigapie needs to work on their execution a bit – what’s to stop someone (or a group of conspirators) from registering two accounts, buying a company with the free 100 credits, selling and buying the company to and from herself, thereby driving up the price before cashing out? This obvious oversight severely undermines the site’s credibility. Gigapie also takes 50% of your profits, an astronomical percentage for a broker.

Gigapie looks like it could be fun. I got 100 credits for signing up, which meant I could afford Flickr, MySpace, Digg and TechCrunch. I thought about which company I thought had the best concept, best track record and the brightest prospects. Which companies would you buy?

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