Mid December saw two key transactions completed. The first major transaction was Gowalla raising $8.5m in Series B financing giving it a valuation of roughly $28.4m. The second transaction was the sale of Friendster to MOL Global for roughly $100m.

Gowalla is a service which effectively allows you to use your iPhone to tag locations you have visited and share them with friends. In addition it has PackRack running on Facebook which drives its social network. Geo-location based applications are currently the flavor of the month resulting in Gowalla obtaining a value per user (UV) of $568 nearly 2.5x higher than Plaxo who witnessed a UV of $200 in May ’08. To put this into perspective Facebook is estimated to have a UV of $32 in May ’09.

Friendster is social network similar to Facebook. It is the third largest network with roughly 50m-150m users depending on what source you quote. In comparison Facebook leads the way with over 300m users. Unfortunately, for Friendster user numbers alone don’t equate to a huge valuation. Depending on which source you use the estimated UV is $0.67 - $2 far less than the $32 Facebook enjoys. It appears that building a critical mass of users will only benefit your valuation if you are the leader in the market you operate in as can be seen with Facebook.