Ahhh, Facebook. Perhaps the biggest thing ever made since sliced bread. I'm on it, you're on it, we're all on it.
With over half a billion active users worldwide, it's become more popular than porn and has a lifted an awkward, freckled, little nerd (obvious envy seeping) to the Forbes list, with a net worth of $ 6.9 billion last year.
Not to mention TIME's Man of the year.
With Goldman's private offering valuing Facebook at $50 billion, they pretty much doubled his net worth and assures a future IPO.
But is Facebook really worth $50 billion to you?
Let's look at the facts; well, what we can estimate anyway.
"The company, based in Palo Alto, Calif., earned $355 million on $1.2 billion in revenue during the first nine months of 2010."
Annualized that'd be roughly $473 million in earnings for the year, and at a $50 billion valuation, that'd make its P/E ratio around 106.
Hmmm... Seems a tad bit high.
That said, an analyst sees that there's still a lot of profit potential in FB, and has even predicted that its value could go as high as $200 billion in 2015.
In that case, it looks like nothing's going to stop Zuckerberg and Facebook from conquering the world.
But wait, wasn't it the same with MySpace?
I was on it, you were on it, hell, most of the world was on it too. MySpace was just as unstoppable as Facebook a few years back, it spewed out sordid "MySpace celebrities", making Indie bands and the likes of Tila Tequila household names yet today, who knows what happened to Todd? Or was it Tim? Tom?
Same with AOL.
And to a lesser (perhaps far, far, lesser) degree, Friendster.
Now, what I ask you is, is Facebook really here to stay?
Will it break the mold and become a massive cash cow in the future?
Or will you short it if you could?
Granted, it's the biggest marketing tool today and it's riding a whole lot of sentiment with every Tom, Dick, and Harry wanting in on it that it'd be stupid not to ride it's tails for awhile.
But for some reason, if I could, I'd much rather be long Twitter.