Given the buzz surrounding privately held social-networking site Facebook, the market's stirred up possible valuations as lofty as $15 billion. How much is the company really worth?
Before we think about what Facebook might be worth, let's examine the only other site that looks a little like that: MySpace. When Rupert Murdoch's News Corp. paid-up $580 million for that social-networking phenom, it seemed crazy.
The company reported earnings this week, and MySpace showed up as a mere rounding error. The operating profits were some undisclosed $23 million.
The Facebook guys do seem a bit more business-minded, and they've already generated $150 million in 2007 revenue. Facebook has recently collected some $300 million from outside investors, including Microsoft.
But founder and leader Mark-Zuckerberg seems ready to burn through that stash quickly, with $200 million in data-center upgrades next year.
Facebook will be worthless as a public stock, and worth a couple of hundred million for an acquirer in a few years. But some blue-eyed, deep-pocketed giant will probably overpay wildly for it soon after the IPO, or before we get that far.
Whatever they pay won't be the real value.
Via Motley-Fool
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