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Is Facebook really worth $100 billion?
The social network is expected to file its IPO this week in what is seen as a "defining moment" for Silicon Valley. But are analysts overestimating its value?
 
Mark Zuckerberg and his team may have transformed Facebook into much more than a place to reconnect with friends, but some critics think it's still overvalued.
Mark Zuckerberg and his team may have transformed Facebook into much more than a place to reconnect with friends, but some critics think it's still overvalued.
Kim Kulish/Corbis

Facebook is prepping for its long-expected initial public offering and could file the paperwork as soon as this week, reports The Wall Street Journal. The deal would be a "defining moment for the latest Web investing boom," with the company expected to raise as much as $10 billion. Such an IPO would yield the 800-million-plus user social network a valuation between $75 billion and $100 billion, making it one of the largest companies in the world, alongside McDonald's and Amazon. But is that really so surprising, considering Facebook's unprecedented user base and the amount of time networkers spend on the site?

No. Facebook is a rare phenomenon: Five years ago I laughed at the idea that Facebook could be worth even $15 million, says Lance Ulanoff at Mashable. "Man, do I feel silly." With Timeline Apps, frictionless sharing, and close to a billion users, Facebook is "growing effortlessly" — something MySpace couldn't do. Zuckerberg and his team have transformed the network into more than a place to "reconnect with old friends"; now it's a "platform for doing things" in "real time." Some people will get "very rich," but that money will be used to help the company innovate and grow into a full-blown platform. "I can see it now: The Facebook TV network!"
"Why Facebook is really worth $100 billion" 

Facebook is "grossly overvalued": The social network's public offering will be a "non-event," says Peter Cohan at Forbes. Are we really to believe some analysts' forecasts that its shares will trade higher than Apple's or Google's? My prediction: After its "first-day IPO pop," Facebook's stock will experience the "same fate that greeted most of 2011's tech IPOs" and slump. Facebook's IPO won't "unleash corporate investment" or transform Silicon Valley. Rather, Facebook "will remain a niche phenomenon in the grander economic scheme."
"Four reasons why Facebook's IPO is irrelevant"

$100 billion is a deal: Anyone can argue that $85 billion to $100 billion is high, says Pascal-Emmanuel Gobry at Business Insider. "But we don't think it's insane." Facebook's future is "very bright," especially when you look at the precedents. Every new technology cycle is dominated by one company that typically ends up worth about $200 billion. (Microsoft dominated the PC era; Google defined the search era.) "Facebook is going to dominate the social era, and therefore it's going to be worth $200 billion some day. Discount that to today and $100 billion looks like a steal."
"Think Facebook's $100 billion valuation is nuts? Read this"

 

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