Printable View
Goldman Sachs and DST have just invested $500 million in Facebook which puts its value at $50 billion. Facebook is still a private company and so it will boost Mark Zuckerberg's value by quite a bit.
The question is, is Facebook worth it or is it overvalued?
For now, it might be. Facebook has unprecedented access to people's personal information, their interests, their habits and their social connections. It recently eclipsed Google and despite the fact that it has repeatedly been found to be sharing people's private information "accidentally", people keep flocking back to it.
Until another social networking site draws people away (or a new development takes over the current social networking trend) it is king.
The main caveat with a pricing like that is that two other formerly mighty (albeit never quite as worldbeating as FB) social networking sites, Myspace and Bebo were ludicrously overpriced. While myspace still has a steady stream of users and will probably generate some advertising revenue for years to come Bebo is all but dead. AOL bought bebo for upwards of $1 billlion in 2008 and sold it in 2010 for a figure less than $10 million. I sometimes wonder if anyone actually learned anything from the dotcom bubble. AOL paid $800 million for what amounted in the end to a four letter domain name. Facebook seems to be in a much stronger position now than either of these also-rans though, and in a sense is taking over the internet, or at the very least defining how many if not most people will interact with the internet.
Meh. Money has the value we've ascribed to it. Since that amount of money has been designated Facebook's "value", then it's worth it. The real question is, how long is it going to be worth that? Will it's value go up or down?
It's unlikely to last forever, but it might not have a dot-com like bubble bursting. It may simply fade as people shift on to something new and in the meantime make its investors an assload of money.