With a $100bn valuation, that would be $125 per user.
But hey, there's room for growth right?
Let's be generous and give them everyone in the world, recently about 7bn potential users total. That's $14.29 per user.
It's hard to imagine a business model that can leverage that kind of money per person on average, much less with all the people who are inaccessible for various reasons.
It's going to be interesting to see where they go with this.
That's just simply valuing each user by dividing Facebook's estimated valuation by the number of users. I'm sure Facebook will not only continue to improve their revenue to constantly please the pencil pushers, but is it so crazy to value each user at $125? Remember, that's not revenue; it's just value per user.
Most public companies trade for at least 12 times their earnings. Google is 20x earnings and their market cap is $190 billion. Your math would be assuming that Facebook will have $0 in assets and will be trading with a P/E of 1. Earnings of $6.25 per year, per user (at 800 million users) justifies a $100B valuation at a 20x P/E with $0 in assets and no expected future growth.
By the "fuck it, we're doing 5 blades!" principle, I predict that Facebook market cap will balloon to $1Trillion, and Zuck will spend a few minutes in the exclusive $200B-and-up club before HF trading automata crush him down to a merely-immortal $5B or so.
Like any other site's stats, that '800 million' is significantly inflated. As an anecdote, I know several people who have at least three accounts. It's disingenuous how companies rarely acknowledge that accounts do not have a 1:1 correspondence to individuals. I think that should be taken into account when speculating about revenue.
So now it's a $100bn? Wasn't it 60bn a few weeks back...
It seems like folks are outdoing each other by proposing higher and higher valuations.
At this rate Facebook will be worth more than the US GDP soon.
I can't wait for the day they actually have to post revenue numbers.
(Don't get me wrong, what they did is pretty cool from a technical viewpoint, but those numbers are insane, and only designed to make a few insiders and many investment bankers rich.)
If he gets $24 billion, can he afford to hire some engineers who can fix all the obvious glaring bugs? Facebook has a terrible time figuring out what messages and notifications are new, and which ones I read a month ago, for instance, especially in its iOS apps.
If one was to buy some Facebook stock on a secondary market, would those shares be converted into public shares when the company IPO's? And if so, would you have to abide by the IPO rules like the minimum hold time?
I was watching Bloomberg West the other day and they were talking about the people who bought Groupon shares on the secondary market at like 30 or 32 a share and that it must really suck to be them because they have to hold for the 180 days.
That number is so large, it's hard for me to wrap my mind around it. For some reason I keep thinking about the fact that California plans to close 70 state parks in order to save $11 million. That is 0.045% of 24 billion.
CA's 2011-2012 budget is just under $86B. Cutting parks to save $11M is saying that there's $86B of other spending that CA thinks are more important than those parks.
Note that Zuckerberg will never see the majority of that money. He can't liquidate without taking the price and even if he does, he'll lose a lot to taxes. (CA has no capital gains rate.) Instead, he'll donate a huge fraction to some foundation.
Totally agree. Considering companies like BMW and Toyota are only worth 20 billion I fail to see how Facebook (even with the hype) can be considered so valuable. I know which one I would rather own if offered the choice.
It's all about the short term, as the article makes clear.
The biggest winners will be those who can cash out quickly. Goldman and some overseas investors.
Long term I think the Facebook _data_ will be sold and resold (licensed) many, many times. It may end up with a company (or companies) that today does not exist. The legacy of Facebook will be the data. We told some antisocial nerd who our friends are. And he sold us out.
Facebook the entity will probably fade away, probably by being acquired. The value is the data. They just managed to get an enormous amount of personal private information for free.
It's an amazing thing to have 800 million people give you their email address, a list of their friends and possibly additional personal info. Certainly there is potential value there. But that itself does not a business make. In my opinion. We'll see what happens.
Honestly, I don't think there's that much value in the data. Most of the big social gaming companies probably have most of that data anyway from scraping the social graph -- if money is in the data, they haven't been mining their data properly.
It will be interesting to see how stricter data protection laws play out. The EU will make a new data protection directive in 2012/2013, and other new laws like in Singapore or HongKong are more influenced by the EU standard than by US standards - because otherwise they may not get outsourcing work from EU. But I still agree that the facebook data is likely to be very valuable...
One of the EU ideas is to give the user a right to "export" their personal data. If there was a functionality where it took you 1 click to recreate all your facebook-data on "SocialNetwork2.0" the switching costs would seem to be very low. I sometimes feel that network advantages are overestimated. Here in Germany we had the facebook clone "StudiVZ" a few years ago, and practically all students were members. Nowadays Facebook dominates here too and many new students don't bother joining "StudiVZ" anymore.
Zuck has talked about this publicly: He foresees Facebook.com fading, and Facebook's social graph to the be the thing that powers every quasi-social activity on the internet.
[+] [-] ColinDabritz|14 years ago|reply
With a $100bn valuation, that would be $125 per user.
But hey, there's room for growth right?
Let's be generous and give them everyone in the world, recently about 7bn potential users total. That's $14.29 per user.
It's hard to imagine a business model that can leverage that kind of money per person on average, much less with all the people who are inaccessible for various reasons.
It's going to be interesting to see where they go with this.
[+] [-] firefoxman1|14 years ago|reply
Most public companies trade for at least 12 times their earnings. Google is 20x earnings and their market cap is $190 billion. Your math would be assuming that Facebook will have $0 in assets and will be trading with a P/E of 1. Earnings of $6.25 per year, per user (at 800 million users) justifies a $100B valuation at a 20x P/E with $0 in assets and no expected future growth.
[+] [-] viscanti|14 years ago|reply
TLDR: Facebook's value should probably be closer to 11 Billion rather than 100 billion.
[+] [-] feralchimp|14 years ago|reply
[+] [-] code_duck|14 years ago|reply
[+] [-] linuxhansl|14 years ago|reply
At this rate Facebook will be worth more than the US GDP soon.
I can't wait for the day they actually have to post revenue numbers.
(Don't get me wrong, what they did is pretty cool from a technical viewpoint, but those numbers are insane, and only designed to make a few insiders and many investment bankers rich.)
[+] [-] Bud|14 years ago|reply
[+] [-] rwmj|14 years ago|reply
[+] [-] firefoxman1|14 years ago|reply
[+] [-] rationalbeats|14 years ago|reply
[+] [-] whyenot|14 years ago|reply
[+] [-] anamax|14 years ago|reply
Note that Zuckerberg will never see the majority of that money. He can't liquidate without taking the price and even if he does, he'll lose a lot to taxes. (CA has no capital gains rate.) Instead, he'll donate a huge fraction to some foundation.
[+] [-] GFKjunior|14 years ago|reply
[+] [-] boyter|14 years ago|reply
[+] [-] unknown|14 years ago|reply
[deleted]
[+] [-] 1010100101|14 years ago|reply
The biggest winners will be those who can cash out quickly. Goldman and some overseas investors.
Long term I think the Facebook _data_ will be sold and resold (licensed) many, many times. It may end up with a company (or companies) that today does not exist. The legacy of Facebook will be the data. We told some antisocial nerd who our friends are. And he sold us out.
Facebook the entity will probably fade away, probably by being acquired. The value is the data. They just managed to get an enormous amount of personal private information for free.
It's an amazing thing to have 800 million people give you their email address, a list of their friends and possibly additional personal info. Certainly there is potential value there. But that itself does not a business make. In my opinion. We'll see what happens.
[+] [-] catch23|14 years ago|reply
[+] [-] Atropos|14 years ago|reply
One of the EU ideas is to give the user a right to "export" their personal data. If there was a functionality where it took you 1 click to recreate all your facebook-data on "SocialNetwork2.0" the switching costs would seem to be very low. I sometimes feel that network advantages are overestimated. Here in Germany we had the facebook clone "StudiVZ" a few years ago, and practically all students were members. Nowadays Facebook dominates here too and many new students don't bother joining "StudiVZ" anymore.
[+] [-] michaelfairley|14 years ago|reply
[+] [-] dman|14 years ago|reply
[+] [-] suivix|14 years ago|reply