With ‘social discovery’ all the rage with apps like Highlight, Banjo and Glancee attracting attention during this year’s SXSW it’s easy to forget there are players out there which have been doing this a tad longer. Badoo de-cloaked as a social network in London a few years ago with ‘discovery’ very much at its core, but with a twist – it encouraged people to promote themselves, sometimes with payment. Where Facebook concentrated on linking up with existing friends and friends of friends, Badoo was literally oriented towards you meeting new people all the time, and for others to push themselves out there. That gave it an obvious flirtatious feel, making it a quasi-dating site which happens to use a different method for getting people to pay. But it’s appealed to a lot of people. And I mean a lot. Currently on 149.8 million users, some time today that will tick over to hit 150 million, given it clocks around 150,000 a day.

That makes it one of the top five social networking sites globally according to comScore, and its growth is being significantly powered by mobile (iPhone, Android, BlackBerry and WAP worldwide). In the U.S. market it’s seeing more new registrations on mobile than on Web, with 68% of new users coming to the site via mobile over the past six months. A health check to these figures is that while mobile is starting to surpass web in the U.S., the global averages would be much lower of course.

Mobile usage has grown by 100% since November 2011, and Badoo says is it more than doubling mobile revenues. The fact that it is monetizing mobile may be of interest to Facebook, which seems to have a terrible time on this front – a third of Facebook’s traffic is mobile but it’s not monetised. Then again, it is over five times bigger.

Badoo’s iPhone app which comes with in-app payments designed to boost your popularity with packs of credits. You literally pay to become more popular and get more visibility in the network. In-app payments are a gift to Badoo, which in the early days used premium SMS as a way for users to supercharge their visibility on the network.

U.S. growth is also being powered by mobile and according to app tracker Distimo Badoo’s Android app is now one of the top 10 most popular apps (No. 7) for social networking, up from 35 in November 2011, while its iPhone app is now a top 25 social networking app, up from No. 60 late last year. AppAnnie says Badoo is regularly a top 5 grossing iPhone app.

Badoo says it is growing in New York (where Badoo just launched its first advertising campaign), Miami, Los Angeles, Chicago, Houston and other cities.

This is helped by a marketing campaign that they are running in the U.S. right now – the first time they’ve ever done anything proactive like that.

The company has released some further numbers to us exclusively, verified by comScore.

These indicate that Badoo has seen over 60% growth year on year with 35 million active users per month worldwide, adding 150,000 new users a day. While Southern Europe and Latin America continue to show strong growth, the U.S., UK, Germany and Russia are growing fast. Badoo was usually strong in Russia and Latin America, but the addition of these developed markets shows Facebook isn’t satisfying everyone’s needs by any stretch.

Badoo is still in profit and has an annual run rate of $150 million. It’s also winning big hitters such as former Google executive Benjamin Ling who was recently appointed Chief Operating Officer.

Andrey Andreev, founder of Badoo, has a different view on social networking to Zuckerberg, who obsesses over sharing. Badoo, says Andreev, is about making it “as easy as possible to bring people together, so they can chat, make friends, date and have fun. And there is a massive opportunity to do this on a global scale.”

And he has big supporters out there.

Shervin Pishevar, Menlo Ventures comments: “Badoo is proof there is a huge global opportunity, and appetite, for using social and mobile tools to connect with new people. And for those tools to work at scale. Importantly, they make the experience fun, easy and fast, so it’s incredibly compelling to a mainstream audience.”

Loïc Le Meur, CEO of LeWeb, says “Badoo’s viral spread from Europe to Latin America, and now to the US, shows the amazing potential of Europe’s tech scene.”

Badabing Badoo, huh.

Maybe even dating sites deserve to find a special someone at one point in their lives… it looks like Badoo, the UK-based dating site, has joined forces with U.S. rival Hot or Not, with Badoo inking a white-label deal to power the smaller site.

The two have yet to issue a formal release of any kind, but Hot or Not now boasts the same amount of registered users as Badoo (146 million+), and Hot or Not now directly refers users to Badoo’s terms and conditions (pictured below). There have been a few observed signs from users, too…

Someone who moderates on Hot or Not posted a question to Yahoo Answers saying that her moderator login now goes directly to Badoo. And the pop-culture blog PopCannon noted on Twitter that Hot or Not had changed “once again” and that the ratings had disappeared with the appearance of Badoo branding on the site.

Hot or Not’s Facebook fans, meanwhile, are now Badoo’s as well.

Badoo is the bigger of the two sites, and says it currently has users across 180 countries.

While Badoo bills itself more as a social network than a straight dating site, and Hot or Not is more of a game-like ratings site, you can see how the two might complement each other as Badoo expands out the features it offers to users.

You can also imagine that as time goes on, networks like these need scale to survive — another reason they might be joining.

We are reaching out to both companies to try to figure out what is going on and will update as we learn more.

Update: This is very much a scale play for both Badoo and Hot or Not. Badoo has confirmed to us that this a white-label deal, in which it is effectively powering Hot or Not’s service on its behalf. It is not disclosing any financial terms.

This deal signals another direction for Badoo’s growth: as a backbone, B2B provider for other social networks. Other sites that also use Badoo’s service like this include icq.com, gentemessenger.com and clubnx.com. Whereas icq has kept a lot of its own branding in the process, the other two have basically been Badoo-ified. Badoo says it got this wrong: it no longer works with icq.com.

On the link up with Hot or Not, a spokesperson tells us the deal was attractive for two reasons. The first is that it gives Badoo more headway into the U.S. market, as this is the first white-label deal signed by Badoo in the U.S.

The second is that Badoo already had a product, Encounters, that worked similar to the photo ratings game on Hot or Not. “We thought we could build on the Hot or Not game and add additional features to make the site even better for Hot or Not users,” she said.

The change happened over the weekend, and Badoo is still working out a few bugs. “Once we’ve got that sorted, Hot or Not users will be notified of the change,” she added. “While some of the features may look different, ultimately, Hot or Not users will come away with a lot more functionality–like more messaging and search features.”

Badoo runs a fine line between a social network and a dating or (more accurately) a flirting site, but it is not at all political. It may be this flirtatious aspect of the site which has inflamed the ire of the strict Islamic authorities – however, there has been no official reason given.

In January 2008 Badoo pulled in $30m from Russian investor Finam for a 10% stake. The money was to build the service in Russia and other emerging markets.

The site had been been working with mobile network Turkcell, which has ties to Irancell, Iran’s predominant mobile network. Because Badoo’s social system is based largely on premium SMS, it sent its payment services through Irancell. However, the current politics over the site’s ban has stalled this operation. Badoo is currently trying to come up with a plan to circumvent the ban to reach its users again.

Michael Geer, CEO and co-founder of the London-based startup, told me: “We first noticed numbers dropping quickly and then a flood of support emails coming in. Which is impressive since the feedback could only come from users that had prior contact with our customer support.” He says there has been no official statement and no reason given. “For the first time in our site’s existence, we are being completely blocked by a market’s government. I don’t know whether to be pissed off or honored!” he added.

The text above appears to have been posted by www.dci.ir which appears to be an arm of the Iranian government.

Badoo emphasises photos and flirting and avoids advertising – instead it bases its business model on a set of premium features. These mostly involve the user paying a small fee via premium SMS to gain more attention to his or her profile on the site. The more you text in, the more your profile is promoted to other users. Simple really.

As such, Badoo turns out to be pretty suited to emerging markets since it is so SMS driven – something which is largely ubiquitious in Iran, and especially when mobile Web access is almost impossible. With a huge number of the population still under 30 years old, Iran is in fact a ripe network for early-adopting young people who have grown up with mobile phones and – albeit limited – internet access. The rise of the use of Twitter there during the recent wave of political protests has been well documented.

Of course, Internet censorship in Iran is not news.

According to the The Committe Against Censorship In Iran (Google translate version, @proxyiran) software and tech companies based in Iran like like Gostar Sharif and Pars Online, the biggest Internet service provider in the country, are largely complicit with the Iranian government in the censorship of web sites hosted outside the country.

Badoo runs a fine line between a social network and a dating or (more accurately) a flirting site, but it is not at all political. It may be this flirtatious aspect of the site which has inflamed the ire of the strict Islamic authorities – however, there has been no official reason given.

In January 2008 Badoo pulled in $30m from Russian investor Finam for a 10% stake. The money was to build the service in Russia and other emerging markets.

We’ve now remodeled social network valuations based on current user numbers and Facebook’s most recent $10 billion valuation. The results are dramatically different.

Based on the original year-old model, if Facebook was worth $15 billion (their then-current valuation), MySpace, with far more U.S. users, was worth nearly $20 billion:

Our model takes Comscore data for available countries and regions. We’ve graphed each of 26 well known social networks with the data we have been able to collect. We’ve then calculated the average advertising spend (estimated by PriceWaterhouseCoopers in a recent report) for each person online in each of those countries. For example, in the U.S., the total 2008 estimated Internet advertising spend is $25.2 billion. We’ve divided that by the number of people online in the U.S. according to Comscore (191 million), to get an average Internet spend per person of $132. View the raw data and calculations here.

The U.S., by the way, is only the 4th most valuable market per Internet user, trailing The UK ($213), Australia ($148) and Denmark ($144).

We’ve then multiplied the average Internet spend per user in each market with the number of unique users each social network has in that market, essentially creating a “weighted average” based on the advertising dollars chasing users. If a social network has more users in the U.S., Japan, the UK, Germany, Australia, and other bigger advertising networks, they will have a higher weighted average valuation.

We believe this model is an effective way to rank various competing social networks. It bumps down networks like Orkut and Friendster who have tens of millions of users in markets with very little advertising spend, and bumps up networks with lots of users in higher value markets.

Based on this model, MySpace is by far the most valuable social network. Second place Facebook has just 75% of the value of MySpace (even though it now has more users), followed by Bebo (26% of MySpace value), Hi5 and Amebio. LinkedIn comes in at no. 11, at 6% of MySpace’s value.

The new model takes into account the dramatic rise of Facebook usage over the last year, the massive recent decline in MySpace usage, and less dramatic changes in the other social networks. We’ve also modeled out the various valuations with the old Bebo ($850 million) and LinkedIn ($1 billion) valuations as pivot points. We’ve also added Twitter to the list just for kicks.

The bottom line: If Facebook is worth $10 billion today, MySpace is worth just $6.5 billion. Bebo is worth $1.8 billion, Twitter is worth $1.7 billion and LinkedIn is worth $0.8 billion. Facebook also accounts for 37% of all social networking value points in our model. Another way of saying this: If Facebook is worth $10 billion, the value of the entire social networking industry is $27.1 billion.

Lots of charts and graphs below. The full model is here if you want to look at all the data (I recommend zooming unless you have super vision). Thanks to TechCrunch intern Dan Romero for running the new model.

It’s time to start comparing the big global social networks on something other than unique visitors and page views. I believe an effective way to value a particular user is based on the average Internet advertising spend per person in the country they live in. The higher the spend, the more value the social network can get out of the user by serving them advertising and other products. That means that, for now, users in a handful of key countries are worth far more in terms of revenue potential than those in the rest of the world.

We’ve begun to build out a model that looks at social network usage by country/region and compares that to available data on total Internet advertising spend in each of those countries. The model is then able to turn an apples-to-oranges comparison into an apples-to-apples comparison. The early results are surprising.

The ultimate financial value of any asset is, ultimately, what the market will pay for it. We have only a few data points to help us: Facebook, Bebo and LinkedIn are worth $15 billion, $850 million and $1 billion, respectively, based on relatively recent valuations (although only Bebo was actually sold completely; Facebook and LinkedIn raised investments at those valuations). The last valuation of MySpace was just $580 million, back in 2005 when it was acquired by News Corp.

Which valuation is most “correct?” It’s hard to say based on the data that’s been available to date, which is mostly just aggregate page view and unique visitor numbers from Comscore and other services. Based on worldwide unique visitors, for example, Facebook recently overtook MySpace to become the “largest” social network.

According to raw worldwide user number, the biggest social networks are Facebook, Myspace, Hi5, Friendster, Orkut and Bebo, in that order. But when you apply the model that we’ve created below, which takes into account where users live, the rankings change substantially. MySpace is by far the most valuable social network based on available data. A competitor like Orkut is worth only 1/20th of MySpace, even though it has nearly 1/4 the number of users.

Properly Ranking Social Networks

Our model takes Comscore data for available countries and regions. We’ve graphed each of 26 well known social networks with the data we have been able to collect. We’ve then calculated the average advertising spend (estimated by PriceWaterhouseCoopers in a recent report) for each person online in each of those countries. For example, in the U.S., the total 2008 estimated Internet advertising spend is $25.2 billion. We’ve divided that by the number of people online in the U.S. according to Comscore (191 million), to get an average Internet spend per person of $132. View the raw data and calculations here.

The U.S., by the way, is only the 4th most valuable market per Internet user, trailing The UK ($213), Australia ($148) and Denmark ($144).

We’ve then multiplied the average Internet spend per user in each market with the number of unique users each social network has in that market, essentially creating a “weighted average” based on the advertising dollars chasing users. If a social network has more users in the U.S., Japan, the UK, Germany, Australia, and other bigger advertising networks, they will have a higher weighted average valuation.

We believe this model is an effective way to rank various competing social networks. It bumps down networks like Orkut and Friendster who have tens of millions of users in markets with very little advertising spend, and bumps up networks with lots of users in higher value markets.

Based on this model, MySpace is by far the most valuable social network. Second place Facebook has just 75% of the value of MySpace (even though it now has more users), followed by Bebo (26% of MySpace value), Hi5 and Amebio. LinkedIn comes in at no. 11, at 6% of MySpace’s value.

Valuation Ranges

The real-world revenue numbers being reported for the big networks supports this approach to valuation and shows a direct tie between monetization efforts and where a network’s users are. MySpace is estimated to have generated $755 million in revenue over the last year. The (now) larger Facebook, with a far higher percentage of users in less lucrative markets, will generate just $255 million this year:

EMarketer estimates that MySpace will post $755 million in revenue in the fiscal year ending June 30. MySpace would not comment on the estimate. About a third of the revenue is expected to come from the Google ad pact. For the year, Facebook is estimated to earn $265 million in ad revenue.

Since we have three recent data points valuing social networks (Facebook at $15 billion, Bebo at $850 million, LinkedIn at $1 billion), we can start to apply valuation ranges based on the model. Facebook’s 10.2 million value points and $15 billion valuation puts a $1,467 value on each value point. LinkedIn is valued very similarly, at $1,325 per value point. Bebo, with lots of users in the rich UK market, appears to have been undervalued at only $241 per value point.

Based on these three publicly available data points we’ve created value ranges for each of the top 25 worldwide social networks. There is a very wide disparity (MySpace, for example, is worth between $3.3 billion and $20 billion, based on which comparable you look at). But it does yield very interesting data. For example, If Facebook and LinkedIn were valued similarly to Bebo, they would be worth just $2.5 billion and $182 million, respectively, far less than what their investors recently paid for a piece of them.

Interestingly, the recent sale of Polish social network Nasza-klasa for $92 million appears to be right in sync with Bebo’s price. The model estimates its value at $91 million based on Bebo’s valuation metrics.

There are some big flaws with the model and analysis in its current state. First, LinkedIn may be in a different class of network, given that all of its users are business focused (no super-poking going on there). As a result, it may be able to monetize users far better than its competitors, no matter what geographic market is being looked at. Still, we’ve decided to leave it in as a data point, with that caveat.

The model itself needs more data. The user numbers are based on April Comscore. We will shortly revise it with the May numbers, although the absolute rankings probably won’t change. More importantly, some big markets are not included yet. The Chinese Internet advertising market, for example, is estimated to be $2 billion in 2008, yet they are not included (mostly because I can’t find data on user numbers for the networks). Also, the Philippines isn’t broken out separately, again due to data availability issues (although the total Internet advertising market in the Philippines is just $3 million this year, so it won’t affect the rankings materially even though Friendster is so strong there). Finally, Russia is currently grouped with “the rest of Europe,” and needs to be separately broken out – it has a large and growing online advertising market and lots of users, so that update may affect the mid-level network rankings.

The advertising spend model is just an estimate and from a single source. I’m less concerned with this data since it doesn’t matter to the model if the estimates are absolutely correct. If the estimates are wrong by different rates in different countries, however, the model will break. If we find better relative data between countries, we’ll update the model with that data. But for now, the PriceWaterhouseCoopers data seems to be pretty good.

Finally, this model doesn’t take into account execution at the company level. Two very similar networks may monetize vastly differently based on methods of advertising and even the brute effort and passion of the employees. This model obviously doesn’t take that into account.

I also note Andrew Chen’s analysis last week which takes a similar approach to this using Google Trends data instead of Comscore. The Google data isn’t granular enough to really dig in to relative values, however, and he was lacking current and deep data on average Internet spend. Still, I agree with his methodology.

As I wrote at the very end of this post, you have to consider the current monetization value of users when comparing social networks. Raw user numbers are pointless without it.

Badoo’s social networking site with photo and video sharing has 12.7 million registered accounts, mostly in Latin America and Continental Europe. Badoo was launched from London in November 2006 and was the number two fastest rising search term on the Google Zeitgeist list for 2007. It will go up against several other russian sites including Odnoklassniki.ru, Vkontakte.ru and Moikrug.ru which have all attracted several million users each. And now the Russian version of MySpace, which launched only last week.

Badoo’s main pitch is that it carries no advertising, avoiding the kinds of issues Facebook had with Beacon. Instead, Badoo derives its main revenue from offering users the chance to pay to be popular. “We wanted to be advertising free in order to have a ‘clean’ site so our users weren’t subject to adverts which we know can be a turnoff,” said Neil Bryant, the managing director of Badoo told The Guardian last year.

They say 20% of Badoo’s 12.5 million users access the function once a month, or $1 or €1, in a blend of Digg and a Reuters ticker. Right now the £1 charge is waved in the UK, where the site has – incredibly – never formally launched. But Badoo is aiming to get traction by using celebrities with its UK launch next month.

According to Quintura, in 2005, Finam bought-out a 68.5% stake in Mamba, a leading online dating community in Russia with over 9 million registered accounts, which is rumored to share the same technical founders with Badoo.

Russian investor Finam has put $30m into UK-based social network Badoo for a 10% stake. The money is to build the service in Russia, where social networking market has reached around 10 million users in January.Badoo’s social networking site with photo and video sharing has 12.7 million registered accounts, mostly in Latin America and Continental Europe. Badoo was launched from London in November 2006 and was the number two fastest rising search term on the Google Zeitgeist list for 2007. It will go up against several other russian sites including Odnoklassniki.ru, Vkontakte.ru and Moikrug.ru which have all attracted several million users each. And now the Russian version of MySpace, which launched only last week.

Badoo’s main pitch is that it carries no advertising, avoiding the kinds of issues Facebook had with Beacon. Instead, Badoo derives its main revenue from offering users the chance to pay to be popular. Instead, Badoo derives its main revenue from offering users the chance to pay to be popular.

comScore shows erratic swings in worldwide traffic, peaking last June at 11.2 million unique visitors, and now at 5.7 million as of December:

(Quintura CEO Yakov Sadchikov has more here).