Facebook's Dilemma: How Valuable Are 900 Million Users?

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Facebook's volatile IPO was the result of disparate opinions about how to value the social network's 900 million users, according to a recent report by the Wharton Business School at the University of Pennsylvania.

"The question for valuation is you need to have both some sort of comparable and some sense of where the numbers are going, and the problem is neither of those are really clear in the case of Facebook," said Ethan Mollick, Wharton Assistant Professor of Management, on CNBC's Squawk on the Street. "Is it a TV network in comparison? Is it Google? Is it something entirely new? And on the underlying numbers it's all about potential. We don't know where the numbers are heading. There's a lot of debate over that. If it's just about pricing the stock where it is today, the value is obviously a lot lower than $100 billion."

Because Facebook is still a young company, there's still a lot of speculation about Facebook's future plans for generating revenue, said Mollick of Wharton. Recently, reports have surfaced that Facebook is working on developing its own smartphone, a move that Mollick said will be one of many new ventures for the company.

"They're still experimenting. We don't know what they are going to do with these 900 million users. There are rumors everyday about, 'Is it going to be launching a phone?' 'Is it going to be a new advertising network?' It's likely to be many of these things and many of them are going to fail," Mollick said.

But Facebook's failures aren't as acute as other companies. Between Facebook's botched initial public offering, shareholder lawsuits and its recent stock dip (Facebook's stock fell below $30 for the first time Tuesday), the company remains at the center of attention when it comes to mishaps.

"So the question is, how does Facebook react to failure? How does it continue to learn without making its much more public missteps a danger to the stock and the people who hold it," Millick said.