Facebook worth 50 Billion. Bubble?

[C-Rob]

Today I wrote on my facebook wall(I thought it was fitting to) that repeated a news outlet's reporting that facebook is worth 50 billion dollars after recent investments. My friend commented that wasn't remotely scary if one considers that Zynga is worth 5 billion. Is it all monopoly money? Is there a social media bubble and will it pop relatively soon? What assets does Facebook have other than buildings full of servers? What is their ad revenue?

EDIT:

Two days after I posted this lo and behold a professional in Newsweek picks up the thought:

http://www.newsweek.com/2011/01/05/s...om-bubble.html

So, how much is Facebook's network of users really worth? The potential is clear—when so many people are gathered in one (virtual) place, offering so much personal information about themselves, they create an unprecedented platform for targeted advertising. Or they would, if they were on the network to shop. When eBay and Amazon suggest products to their customers, they're talking to people who've already proven that they're interested in buying similar products. People go on Facebook for a variety of reasons—to catch up with old friends, share pictures, make new acquaintances, and talk, sometimes endlessly, about themselves. Whether they'll appreciate having their virtual conversations interrupted by advertising, targeted or not, remains unclear.

I thought that was interesting. So does facebook need to evolve?
The comments section actually had some intelligence, for once:

I think the big thing you are missing is the reality that unlike the companies you mentioned, Facebook and Twitter have become Lifestyle brands in the way that Starbucks has. The price of coffee went up because of the intangible value that was offered in the experience. Facebook, Twitter, and even LinkedIn are integrated into our lives now in the way that email is. The platforms as we know them will eventually go away, but they are the new telegraph, telephone, fax machine, and email system. As such, the value is in the network and in the extra value brought in the experience as we interact with one another. In that way, they aren't a service provider, web property, or destination site at all.

[GreyFox]

All that can be found out by checking their tax returns.

[Gaidin]

Today I wrote on my facebook wall(I thought it was fitting to) that repeated a news outlet's reporting that facebook is worth 50 billion dollars after recent investments. My friend commented that wasn't remotely scary if one considers that Zynga is worth 5 billion. Is it all monopoly money? Is there a social media bubble and will it pop relatively soon? What assets does Facebook have other than buildings full of servers? What is their ad revenue?

It all depends on how fast people get tired of facebook and stop using it. So far, not enough people quit fast enough. It's not as much a bubble as you think.

[chilon]

What assets does Facebook have other than buildings full of servers?

The first or second most visited website on the internet which is no small accomplishment to be the only website that has dethroned the King of Search Google.com (Its been dueling with Google for a year now).

A huge database of web browsing behavior that is gold to data aggregation firms and provides the best outlet for targeted advertising currently on the internet.

A platform for a large number of application developers, Zynga being most famous.

So is Facebook's web data infrastructure worth $50 Billion? Maybe. We'll see if they ever go public. Their business model is certainly more sound than Twitters (the laughing stock of IT venture capitalists).

[Nikos]

Moved to the Academy

-Nikos

[JNS]

Is it worth a couple of billion? Possibly. But there is no way facebook's revenues (which is mostly advertisement) match that market estimation. Really what's the last time you clicked a FB ad? Zynga makes money because it charges for stuff in most of their games. FB is completely free, which is also part of its appeal and popularity. pay people would
Also there's also the possibility it might go the way of myspace and yield to a better social network. To me this estimated value is way overboard, and like many internet companies before it, it may blow up right in their faces.

[removeduser_487563287433]

Today I wrote on my facebook wall(I thought it was fitting to) that repeated a news outlet's reporting that facebook is worth 50 billion dollars after recent investments. My friend commented that wasn't remotely scary if one considers that Zynga is worth 5 billion. Is it all monopoly money? Is there a social media bubble and will it pop relatively soon? What assets does Facebook have other than buildings full of servers? What is their ad revenue?

Let's talk about an advertising campaign I ran for a driving instructor franchise. Facebook allows me to show my ads only to people in the 17-20 age group, making my budget work much harder because I am not wasting cash on people who have been driving for twenty years.

If I am pushing a new block of flats for rent then I can target only people listed as living in the local area.

So long as people keep on putting data into Facebook, advertisers will be eager to pay for that level of targeting. No, it is not a bubble. Facebook is huge - the most searched for term, and I think something like 1/5 page views on the internet are on Facebook.

[Panzerbear]

Facebook is huge, there is no denial about it. if the market currently rates it at $50 billion, then it is probably so. remember, the market price already factors in everything possible in terms of company evaluation.

[removeduser_487563287433]

[Panzerbear]

haha somebody is actually googling "google" or "facebook.com" ?

[removeduser_487563287433]

haha somebody is actually googling "google" or "facebook.com" ?

Somebody? It's the 9th most frequent search query.

[Jaketh]

Somebody? It's the 9th most frequent search query.

what idiot would search for it when they can just type it in the URL

[removeduser_487563287433]

what idiot would search for it when they can just type it in the URL

Millions upon millions of people.

[Ramashan]

Not sure that it could be called a 'bubble' in the modern sense of the word. Unless you are applying it to its investors. Over the years we have gone through a series of these social media sites; AOL, Yahoo, Friendster, MySpace, Facebook, and I'm sure there will be more in the future. But, so long as people are willing to use them, then advertisement revenue will be gained.

I wonder how much of the 'worth' is based on revenue and how much on the actual inherent value at owning the product?

[C-Rob]

someon said something about the web infrastructure they own could be worth a ton, which is probably true. Not to mention teh brand name.

I agree it's worth a ton, just 50 billion seems excessive.

[Ramashan]

Whenever I want to get to my gmail, reader, or google books accounts I just type 'google' into the search widget at the top of my browser. I'm many others do the same.