$10 Billion For Facebook Makes Some Sense

    September 25, 2007

$10 billion is a lot of money, but some say that’s how much Facebook is worth.  $15 billion is, of course, even more, and the social network’s value has also been connected to that figure.  Believe it or not, this isn’t total lunacy.

Sure, it might look it.  Heck, Jamaica’s GDP falls into that $10-$15 billion range, and I think rather few people would elect to own a website instead of a tropical island.  Microsoft isn’t prone to gambling, however, and it was Redmond’s own math that equated five percent of Facebook with $500 million.

That number was made public by the Wall Street Journal, a strong and solid source.  Another good place to get information is Nielsen//NetRatings, and earlier today, the research firm revealed that Facebook is now receiving more unique visitors in the UK than MySpace.

Facebook had a slim margin of victory in August – just around 100,000 people.  Still, given the network’s phenomenal growth, this is likely to widen.  With enough time, the gap should really open up, and marketers’ dollars will flow in to take advantage of Facebook’s forthcoming system of targeted advertising.

Statistics from Compete indicate that the same sequence of events could occur in the US.

So, is a single social network better than Jamaica?  Maybe not.  But Microsoft may also view Facebook as a sort of tipping point in the battle against Google and Yahoo.  In this scenario, the network would act as a priceless key to the Internet kingdom, in addition to whatever value it had on its own.