How much is Facebook really worth?

Up until this moment Facebook shares are still going down. Starting from the price of $38 at IPO, Facebook shares are now worth $27.20 as I’m writing this blog post. Just how much are Facebook shares really worth?

The biggest asset of Facebook is the 900 million users worldwide. But that does not show the earning potential of Facebook. It only shows that Facebook is able to target the 900 million users and try to make money out from them. Now that Facebook goes public with IPO of $38 per share, investors will look into how Facebook uses the money to increase revenue. The social media site is not like any other regular business where the more money you invest the higher revenue you gain by increasing products or services sale. When we look into Facebook carefully, the site is not selling products or services. As for now online advertising seems to be the only source of revenue for Facebook. When most investors have the above similar speculation, it is obvious that the money which Facebook pulls in after going public is not going to be much help in boosting revenue directly. Plus there are examples of several similar sites like MySpace and Friendster which shows that social media site does not last long. Whenever there is a new social media site with new features introduce, the spotlights tend to follow. Now that Facebook has successfully go public and collected funds, the site has one shot to justify their value. Judging from the price of their shares since IPO, Facebook has to move fast.

Check out the blog post title “Has Facebook Spoiled the Social Medial Story?” from Yahoo Finance. It seems like the true value of a social media site can only be seen right after going public. I suppose in the business world, only businesses with great earning potential can survive. If you look at Facebook as a type of business instead of a social media site, will you consider investing your money into it?



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