Facebook's Valuation: $100 Billion?

Mark Zuckerberg
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Mark Zuckerberg

Is Facebook worth $100 billion?

That’s the valuation likely to be assigned to the company in an initial public offering sometime next year, according to CNBC’s Kate Kelly.

That’s an eye-popping 100 times last year’s revenues. It’s twice the valuation the company had at its last fund-raising round through Goldman Sachs . Has Facebook doubled its value since then?

Just four years ago, Microsoft invested $250 million at a $15 billion valuation. A $100 billion valuation would translates into a 566.66 percent gain!

All along the way, Facebook’s valuations have attracted tut-tutting and headshaking. And, no doubt, the new price tag will surely have many screaming that we’re witnessing another Internet bubble.

But Facebook’s valuation story is not a one-way rocketship to the moon. It’s value has had a rocky ride up to the current orbital levels.

As the chart below (compiled with data from TechCrunch and Silicon Alley Insider; click the links to see the details of the transactions) shows, Facebook’s valuation stumbled early on and then again in 2008, during the financial crisis. It stayed at depressed levels for most of 2009.

The moon shot valuations didn’t take off until 2010.

So is Facebook worth it? Well, here’s a chart comparing Facebook to other big internet companies. So Facebook won’t be the highest valued internet giant—but it is damn close.

Then again: I spend a lot more time on Facebook every day than I do on any site other than Google or CNBC.com. So maybe it does maybe it does make sense.


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