Facebook Valued at 10 Billion Dollars

by Manshu on May 26, 2009

in Economy

From Bloomberg:

Facebook Inc. received an investment from Russia’s Digital Sky Technologies that values the company at $10 billion, a third less than the valuation assigned to the social-networking company when Microsoft Corp. invested in 2007.

Digital Sky will buy $200 million in preferred stock, gaining a 1.96 percent stake in the company, Palo Alto, California-based Facebook said today in a statement.

I really find it difficult to digest the fact that Facebook is worth 10 billion dollars and I think the guys who are valuing this at 10 billion make a mistake. That’s not based on any mathematical model but just that I don’t remember the last ad I saw on Facebook and I am pretty positive that I never clicked on one.

{ 4 comments… read them below or add one }

Mikael @ Retire Early May 27, 2009 at 11:17 pm

I definitely agree with you that as it is Facebook does not act like a company that ought to be worth that amount of money. However they do have so much targeted personal information about their users that if they knew what they did they should easily be able to make a HUGE profit from it and then the value might be fair.

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Manshu May 28, 2009 at 2:02 pm

One of the reasons of my skepticism is that I don’t read any great reviews on how marketing on FB has helped someone greatly. I am not sure how many of those impressions or clicks actually translate into any sales.

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Will Luxing June 1, 2009 at 5:15 pm

I have to say that I agree. Valuing facebook that high was probably a mistake. The last ad I clicked on facebook was because of the strategic placement and its proximity towards a different link I was trying to click.

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manshuv June 1, 2009 at 5:25 pm

If they are tricking people into clicking ads, they will not go so far. I’d be interested to know what valuation model they used for this.

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