The first comment on this article says it all:
"This valuation is preposterous, because the methodology is preposterous. There is zero evidence that either the markets or investors use some arbitrary "multiply users by a dollar amount" calculation to determine a valuation for these companies. Using such a formula to arrive at an absurd number is especially egregious here because people will now use the authority of this publication to say "Businessweek reports that Goodreads sold for a billion dollars", though that's almost certainly not the case."