Facebook’s Value Potential

Facebook heads toward values measured in tens of billions, and their revenue ramp-ups will put them in the same league as Yahoo, Google and eBay. A recent report from an online marketing firm that trades assets gave Facebook a value of roughly 41 billion dollars. By comparison, eBay's market capitalization is about 39.3 billion dollars and Google stands near 186 billion. Yahoo comes in at nearly 21 billion dollars. Some analysts of internet values compare Facebook to Yahoo and Google, since all three companies are web-based. But the trajectory of Facebook stock is not certain, as you can see by the varying fates of Yahoo and Google. Google began trading in 2004 at $85 a share and is now trading at $584. By comparison, Yahoo's stock was originally $24.50 a share in 1996, and at its highest, was over $100 a share. But now its value is only $16.24. Experts don't think that Facebook will reach the astronomical numbers of Google, but then, no one predicted that Facebook would have more page hits in a day than Google, either. But Google's stock was high when the stock market was up, and all the stocks were higher. Internet marketers do believe that Facebook may match Yahoo and Google in the rate of revenue, if it monetizes its user base. Market analysts feel that Facebook is in a good position now, and their advertising revenue growth shows that the way they earn money can be different over a few short years. Facebook is not mature yet as far as revenue and income source stability go, but they look favorable, as compared to Yahoo or Google, before they went public. To increase their streams of revenue, Facebook expands beyond its roots of social networking. Their new message service is an attempt to evolve communication online. They are confident that people will use newer message services more than they use email, more like they IM and text. The monetization potential of the service is not clear, but opportunities abound. Right now, Facebook doesn't scan their message content for the purposes of advertising. Yahoo and Google scan message contents and target their users' emails. Facebook's method may earn trust from their users, since they have had some issues with the privacy settings at Facebook. It doesn't necessarily mean that they won't be making money; the more time their users spend on Facebook means more awareness of ads. They can also make money with the Places Deals platform, which is a program similar to Groupon, allowing local merchants to target people and promote local deals.