Comments on: Why is Facebook worth $10bn?

By: Facebook grabs another $60m investment

Facebook grabs another $60m investment — Mon, 03 Dec 2007 13:56:12 +0000

[...] December 3, 2007 by Vinny Lingham Powered by Gregarious (21)Ok - so the $15bn valuation is holding up, according to Kara Swisher. Granted, when it comes to Chinese billionaires, and large software companies that put $240m in for less than 2%, it’s arguable that the valuations are not realistic. Heck, I think I was even the first person to predict that they would get a $10bn valuation. [...]

By: The Devil has come to town… do you party or run away? | Cape Town news

Mon, 29 Oct 2007 12:27:26 +0000

[...] many scarcely could believe that FaceBook could possibly be valued at $15 billion, except possibly Vinny Lingham, who came close in August 2007 when he conservatively valued FaceBook at $10 billion. So Lingham was off by $5 [...]

By: Facebook valued at $15bn - raises $240m from Microsoft

Facebook valued at $15bn - raises $240m from Microsoft — Wed, 24 Oct 2007 23:08:00 +0000

[...] 25, 2007 by Vinny Lingham Powered by Gregarious (21)Ok - my bad. I said $10bn - I won’t take it personally if you unsubscribe from my blog. The story is covered by [...]

By: Vinny Lingham

Vinny Lingham — Sat, 29 Sep 2007 06:13:27 +0000

Get Serious:

Firstly, I can only wish I had Facebook stock! The truth is that I don’t.

Facebook’s 10bn valuation is based on a PE of 300 - as they are making $30m in profits this year - not bad for a 3 year old company.

Let’s work out some projections going forward if they continued to grow at a 100%/year - which is what Google achieved for the first few years after launching Adwords. Facebook have enough impressions and off a small base, can definitely grow quickly:

2007 - $30m
2008 - $60m
2009 - $120m
2010 - $240m

Basically, in 4 years, if they can achieve moderate growth in their user base, but improve monetization - getting to a $240m/annum profit base - at a PE of 40 - which is pretty common - the company can easily be valued at $10bn - it’s not a bubble - there are revenues, discounted cash flows, and a steep growth curve ahead. The reality is that Facebook will probably grow at more than 100%/year.

Remember Metcalfe’s law, and you will understand why their network is so valuable!

By: Get Serious!

Get Serious! — Fri, 28 Sep 2007 23:47:39 +0000

BUBBLE 2.0. All we need to say! The CEO’s ego will get the best of him and those involved. Take the money and run, remember Friendster. Facebook will never be a Google, Yahoo, or MSN. Remember what happened to Yahoo when their business model was based pretty much on advertising alone. They fired Tim Koogle and changed their business model. They have several revenue streams but their stock is still down 60% since 2000 and the valuation is finally realistic. Maybe? People thought Facebook was stupid to not accept a billion from Yahoo. Now a year later, people are saying it is worth $10-$15 billion. Did that much really change in the past year to justify this speculation. Friendster was a fad. These are pretty much college kids we are talking about. What are they really worth per user? After they get into the “real world” they will not be spending hours a day on Facebook. If someone pays over $2 billion for them, it will be seen as the same mistake Yahoo did with Broadcast.com Mark Cuban 1.0. Zuckerman 2.0???? Or will his lack of experience get the best of him? Seriosly, Vinny. Just do simple P/E Ratio and simple Wall Street Math. It will take 500 years to make sense at a $10 -$15 million valuation. Common, don’t feed the media hype! Be a responsible media journalist but you probably have some back end alterior motive to righting this article.

By: Vinny Lingham

Vinny Lingham — Tue, 25 Sep 2007 20:15:53 +0000

It looks like I was right after all

By: Facebook IS worth $10bn - says Microsoft

Facebook IS worth $10bn - says Microsoft — Tue, 25 Sep 2007 17:12:36 +0000

[...] I wrote about my justification on why Facebook was worth $10bn a month ago, I had a lot of skeptics who thought that I was smoking some really good stuff. In [...]

By: Thought Leader » Vinny Lingham » Show me the money!

Thought Leader » Vinny Lingham » Show me the money! — Fri, 21 Sep 2007 05:39:48 +0000

[...] do not currently justify the level of spend at present. I’ve written extensively on what the value of social networks such as Facebook is, and it specifically mentions that the value is in the data and the use thereof [...]

By: Facebook Applications To Boost Your Web Presence » PPC Blog by Gordon Choi - Effectively Managing and Optimising Paid Search Marketing Projects

Fri, 07 Sep 2007 20:29:42 +0000

[...] is certainly worth 10 billion dollar according to this analysis on Vinny Lingham’s blog, especially when its large and organized user base is integrated with [...]

By: jonathan miller

jonathan miller — Fri, 07 Sep 2007 09:09:20 +0000

gordon, that’already happening with the announcement this week of google now being able to reach in and search facebook profiles. a move which holds enormous opportunity for both the companies contextual marketing revenue potential - but at what cost? : blogged this about it just today from heathrow http://blog.forgebusiness.com/187/s-acebook-a-predators-nirvana/

vinny? what’s your take?
jon