IP Democracy: Is Facebook Worth $10 Billion?

Almost a year ago to the day, news surfaced that Yahoo! purportedly offered $1 billion for Facebook, an amount that seemed astronomical at the time. Some people, and I think I was one of them, suggested that Mark Zuckerberg, founder and CEO and guiding force behind the meteroic social networking platform, should take the money and run given the vicissitudes of the Internet.

It looks like Zuckerberg outsmarted everybody. According to the Wall Street Journal today, Microsoft is in talks to gain a 5% stake in Facebook for $300 million to $500 million, which places a value on the platform of around $10 billion. Not only that, but the Redmond software titan, which hopes to beef up its ad revenue strength by leveraging Facebook's seemingly endless possibilities, is in competition with Google.

Both powerhouses want a slice of Facebook, a contest that can only mean even more upward pressure on the service's valuation. Zuckerberg is apparently holding out for an investment stake that would put the value of the company at $15 billion.

In a year, then, Facebook has multiplied its value by at least ten-fold. Sometimes taking the money and running is a bad idea.

Posted by Cynthia Brumfield on September 24, 2007 3:44 PM to IP Democracy