Why Facebook Thinks You’re Worth $125.00

Facebook filed Wednesday to raise $5 billion in an initial public offering.  Talk about a PR explosion!  Fun stuff, eh?  A $100 billion market cap would make the company worth just about as much as McDonald’s.  Not bad for a company still basically in its infancy.

In 2011, Facebook earned $1 billion on sales of $3.7 billion. As of December 31, Facebook had 845 million monthly active users.  The company estimates that each of its 800 million users is worth $125.00.  I actually think I’m worth quite a bit more and personally take umbrage at being valued at a mere $125.00, but there you have it.  If I decide to bail on Facebook, they’ll suddenly be worth $125.00 less than they are now, which I’m confident keeps them up at night.  .

Compared with other social media companies that have gone public, $125 is a rather high figure.  But when you consider the amount of personal information that Facebook users are willing to share for free, the market could be convinced the price is right, even though the stock performance of other social media sites has not been stellar. Without the true share price information, the company’s valuation is still up in the air.  Facebook itself conducted its own valuation and as of December 31, it figured that the price was worth $29.73 per share.  Who would know better?

Although I do belong to the cult of Facebook I can’t say that it’s actually by choice. It’s one of those “shoulds” we all deal with.  It makes me nervous if truth be told.  I did an unofficial survey of ten people today and although all were on Facebook, each one found the site rather creepy.  Creepy seemed to be the operative word.  Each person had his or her own reasons why it made them nervous, yet all were still on the site.  All but one, whose photos during a vacation liaison ended up posted on Facebook (without his knowledge).  He no longer “Friends” or “Likes” and now solos on Twitter.

So, best everyone watch themselves.  I read that private eyes gather most of their information from Facbook now a days.  I have no idea if that’s true or not, but when it comes to taking care of your own PR or media relations campaign, one apparently can’t be too careful in the Facebook world.  That said, we Facebook members know how much we’re worth.  The real question is – is Facebook worth 5 Billion?

Copyright © Anthony Mora 2012

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