A social networking dot com worth $50,000,000,000????

Discussion in 'Wall St. News' started by S2007S, Jan 3, 2011.

  1. S2007S


    Ask yourself, what does facebook do to be worth $50 Billion dollars?????

    They do not manufacture anything or build real infrastructure, they do not offer any kind of service besides providing a medium or forum for people to send messages and pictures of what they are doing on a minute to minute basis, like what they are eating or what they are wearing, I laugh at the fools who think this company is worth as much as they say it is.

    The start of a new year and one of the first pieces of news to touch down is that facebook is now valued at $50 billion after an investment by goldman. Pretty funny how high they have pushed the value of this company, talk is that it can be worth more. What I find simply amusing is that this is just another 2.0 website making money mostly from ads just like the rest of the dot coms out there. Facebook in my opinion is actually peaking in growth, they have close to 600 million people which is twice the population of the USA, growth is going to slow. By the time this company goes public or if they ever do there will be more people signing off facebook than signing on, facebook is a fad just like the rest of the social networking sites that have come and go, anyone remember friendster or myspace. They were very popular years back only to be forgotten about, the same thing will happen to facebook in years to come. What does facebook do, what does it contribute, its a social networking site that makes money off of ads.

    Goldman Invests in Facebook at $50 Billion Valuation

    Published: Monday, 3 Jan 2011 | 5:22 AM ET
    Text Size
    By: Andrew Ross Sorkin and Evelyn M. Rusli
    The New York Times

    Facebook, the popular social networking site, has raised $500 million from Goldman Sachs and a Russian investor in a deal that values the company at $50 billion, according to people involved in the transaction.

    The deal makes Facebook now worth more than companies like eBay [EBAY 28.6299 0.7999 (+2.87%) ], Yahoo [YHOO 16.74 0.11 (+0.66%) ] and Time Warner [TWX 32.265 0.095 (+0.3%) ].

    The stake by Goldman Sachs [GS 172.0348 3.8748 (+2.3%) ], considered one of Wall Street’s savviest investors, signals the increasing might of Facebook, which has already been bearing down on giants like Google [GOOG 602.65 8.68 (+1.46%) ]. The new money will give Facebook more firepower to steal away valuable employees, develop new products and possibly pursue acquisitions — all without being a publicly traded company. The investment may also allow earlier shareholders, including Facebook employees, to cash out at least some of their stakes.

    The new investment comes as the Securities and Exchange Commission has begun an inquiry into the increasingly hot private market for shares in Internet companies, including Facebook, Twitter, the gaming site Zynga and LinkedIn, an online professional networking site. Some experts suggest the inquiry is focused on whether certain companies are improperly using the private market to get around public disclosure requirements.

    The new money could add pressure on Facebook to go public even as its executives have resisted. The popularity of shares of Microsoft [MSFT 28.08 0.17 (+0.61%) ] and Google in the private market ultimately pressured them to pursue initial public offerings.

    So far, Facebook’s chief executive, Mark Zuckerberg, has brushed aside the possibility of an initial public offering or a sale of the company. At an industry conference in November, he said on the topic, “Don’t hold your breath.” However, people involved in the fund-raising effort suggest that Facebook’s board has indicated an intention to consider a public offering in 2012.

    There has been an explosion in user interest in social media sites. The social buying site Groupon, which recently rejected a $6 billion takeover bid from Google, is in the process of raising as much as $950 million from major institutional investors, at a valuation near $5 billion, according to people briefed on the matter who were not authorized to speak publicly.

    “When you think back to the early days of Google, they were kind of ignored by Wall Street investors, until it was time to go public,” said Chris Sacca, an angel investor in Silicon Valley who is a former Google employee and an investor in Twitter. “This time, the Street is smartening up. They realize there are true growth businesses out here. Facebook has become a real business, and investors are coming out here and saying, ‘We want a piece of it.’”

    The Facebook investment deal is likely to stir up a debate about what the company would be worth in the public market. Though it does not disclose its financial performance, analysts estimate the company is profitable and could bring in as much as $2 billion in revenue annually.

    Under the terms of the deal, Goldman has invested $450 million, and Digital Sky Technologies, a Russian investment firm that has already sunk about half a billion dollars into Facebook, invested $50 million, people involved in the talks said.

    Goldman has the right to sell part of its stake, up to $75 million, to the Russian firm, these people said. For Digital Sky Technologies, the deal means its original investment in Facebook, at a valuation of $10 billion, has gone up fivefold.

    Representatives for Facebook, Goldman and Digital Sky Technologies all declined to comment. Goldman’s involvement means it may be in a strong position to take Facebook public when it decides to do so in what is likely to be a lucrative and prominent deal.

    As part of the deal, Goldman is expected to raise as much as $1.5 billion from investors for Facebook at the $50 billion valuation, people involved in the discussions said, speaking on the condition of anonymity because the transaction was not supposed to be made public until the fund-raising had been completed.

    In a rare move, Goldman is planning to create a “special purpose vehicle” to allow its high-net worth clients to invest in Facebook, these people said. While the S.E.C. requires companies with more than 499 investors to disclose their financial results to the public, Goldman’s proposed special purpose vehicle may be able get around such a rule because it would be managed by Goldman and considered just one investor, even though it could conceivably be pooling investments from thousands of clients.

    It is unclear whether the S.E.C. will look favorably upon the arrangement.

    Already, a thriving secondary market exists for shares of Facebook and other private Internet companies. In November, $40 million worth of Facebook shares changed hands in an auction on a private exchange called SecondMarket. According to SharesPost, Facebook’s value has roughly tripled over the last year, to $42.4 billion. Some investors appear to have bought Facebook shares at a price that implies a valuation of $56 billion. But the credibility of one of Wall Street’s largest names, Goldman, may help justify the company’s worth.

    Facebook also surpassed Google as the most visited Web site in 2010, according to the Internet tracking firm Experian Hitwise.

    Facebook received 8.9 percent of all Web visits in the United States between January and November 2010. Google’s main site was second with 7.2 percent, followed by Yahoo Mail service, Yahoo’s Web portal and YouTube, part of Google.

    For Mr. Zuckerberg, the deal may double his personal fortune, which Forbes estimated at $6.9 billion when Facebook was valued at $23 billion. That would put him in a league with the founders of Google, Larry Page and Sergey Brin, who are reportedly worth $15 billion apiece.

    Even as Goldman takes a stake in Facebook, its employees may struggle to view what they invested in. Like those at most major Wall Street firms, Goldman’s computers automatically block access to social networking sites, including Facebook.
  2. Crispy


    Im not on facebook

    I dont care about facebook

    But I understand the value. Thats a shit-ton of valuable info. All those people sharing every tiny detail of what they do, eat, drink ,buy ...etc

    Data scrape anybody?
  3. S2007S


    People need to realize that everything they post, do or say is being kept in servers, trillions and trillions of data is being held on servers that people have no clue about, every pic they post is kept on facebook servers forever. Dont think when you take that info down or delete its gone forever. Maybe for you it is but facebook still holds every piece of data small or large that is sent to them.
  4. StopLoss


    I won't comment on the actual valuation, a lot goes into these numbers. But I think FB is a lot more than a vehicle for ads. It's a marketing gold mine. It's what marketers have been after for years, direct feedback on the ads, on the products and everything else. Without contacting people to survey, you know who "likes" what based on what they click. From that, you have entire profiles of everyone on facebook from age, family size to their likes and dislikes.

    Levis Jeans creates a page, people click the "I like" button and now Levis is connected to its consumers. Not to random consumers, to consumers who actually expressed interest AND their friends.

    In an entire economy driven by consumption (people waiting in line for the latest iPod, iPhone, Nike kicks, Xbox... need I say more), this has significant value.
  5. gucci


    Cynical but spot on.
  6. Some thoughts

    (1) There is maybe a clear lack of new ideas for wealthy people to invest their money.


    (2) Wealthy people (or their descendents) do not have the knowledge to understand new ideas other than the facebook type sold to them by IB salesman


    (3) It is a clear political signal to US business that money will not flow to production and new ideas but to information management and production will stay with China


    (4) That the paradigm of creating and bursting bubbles, a.k.a. Ponzi scheme, will continue at the expense of the real producing economy.

    Now, you guys figure out why.
  7. Goldman is putting that valuation because they want to underwrite the eventual IPO.

    As for worth, what dollar about would you put on more information about individual people then the world governments combined?
  8. Larson

    Larson Guest

  9. some of these valuations lead me to believe that the currency has no value at all.

    fucking Weimar Republic

  10. LEAPup


    Personally, I wouldn't use facebook again if Tony Soprano himself were standing over me with a machine gun saying log in now.

    I remember when I used to have a f/b account, and I want to take a bath now just thinking about it!

    On a side note, every time I went to a site like a men's suit site, for example, after that, and logging on to f/b the side bar ALWAYS had stuff like mens clothes, mens shoes, etc.,

    I'm far from a cupmuter guru, but it's pretty easy to figure out what was going on.

    Those of you who use f/b, all I can say from experience is my quality of life improved big time after ridding myself of that leech!
    #10     Jan 3, 2011