Are you on Facebook? Of course you are. And how much do you think your membership is worth to Facebook? Remember, you’re one of 845 million users and counting.
Well, Facebook is expected to have a valuation between $75 billion and $100 billion when it begins trading in May. It’s already above $100 billion on private markets. Let’s accept that the valuation is $97.94 billion, one of the commonly accepted numbers being thrown around.
Based on Facebook’s valuation, and its 845 million users, each Facebook user is worth about $116. Surprising?
Michael McHugh of YCharts applied this member-valuation to LinkedIn and Twitter as well: LinkedIn, with 150 million users and a $9 billion valuation puts members at $60 each. Twitter’s 200 million (more or less) users are worth about $50 a pop.
You would think, says McHugh, “that somebody linking up with a CFO or other business professional would be more valuable than, say, your aunt who posted pictures of her dog or the hipster trying to understand the universe 140 characters at a time… But the dog-photo poster wins out.”
Meanwhile, reports Nicholas Carlson of Business Insider, Facebook’s revenues are actually decelerating, reaching $3.7 billion in 2011.
“A Facebook valuation that is 15 times the size of its 2011 revenues would be something around $50 billion. A valuation 15 times the size of Facebook’s projected 2012 revenues would value the company between $55-$80 billion.” That’s a big difference from the currently accepted $100 billion valuation.
Work is underway to make sure Facebook stays at the upper end of that valuation range, but that theoretical difference pretty much halves a user’s value to the company.
Business Section: Investing Ideas
The valuation of social media sites is a hot topic, especially with Facebook’s IPO on the way.
Use Kapitall’s Compar-O-Matic to see the company’s changes in average analyst recommendation relative to its industry competitors.
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Written by Rebecca Lipman.