Facebook Worth $10 Billion
According to WSJ, Microsoft is considering an investment in Facebook that would give Microsoft a five percent stake, and would value Facebook at $10 billion.
“Facebook, which is used by over 40 million people to set up their own personal Web pages, to communicate with each other and to share photos and videos, has emerged as the poster child for the latest Internet wave. The company expects this year to have a profit of $30 million on revenue of $150 million, according to people familiar with the matter. Based on that, a $10 billion valuation for the company is sky-high.”
I don’t know much about finance, so maybe I’m reading those numbers wrong. Facebook spends $120 million a year? Really?? They have a few hundred employees, office space in Mountain View to house them, and a big server bill. But $120 million in expenses?Â I’ve got to believe their profits and margins are better than reported above, and that their revenues will grow much faster than their expenses for a while, which would say that a $10 billion valuation is slightly less sky-high.