Is Facebook Worth $100 Billion? Investors Bullish, Analyst Cautious

Facebook’s value has risen to $100 billion since its IPO announcement, based on private trades of its stock. But could Mark Zuckerberg justifiably exclaim, as though shaking his locks in a L’Oréal commercial, “I’m worth it”?

Investors, who see social media and micropayments rocketing the tech sector to new riches, are naturally excited, but many agree much of the value is merely potential until Facebook can solidify its direction…

“We’re just at the beginning of the Facebook era,” said Neil Rimer, a founding partner of Index Ventures, which, he revealed, has a small stake in the site.

“Facebook hasn’t really exposed a lot of the opportunities it has to monetise. It hasn’t decided which portions of its universe it wants to own versus a platform for all-comers. We’re small shareholders in Facebook, so we ask themselves this question regularly.”

Rimer was speaking at the FT Digital Media Conference, where Balderton Capital partner Dharmash Mistry concurred…

“If you look two years forward, you can see them generating $5 billion or $6 billion earnings, so a $100 billion valuation doesn’t seem that crazy. But sustainability is key.”

And Leonid Boguslavsky of the ru-Net Holdings investment firm said it can be worth ignoring naysayers…

“When we invested in Yandex, it had zero revenue and was not even the number one for search in Russian,” Boguslavsky said.

“We talked to two famous funds about our portfolio. They said Yandex is worth nothing. They were smart people with a lot of experience.” ru-Net pressed ahead, investing $10 million and helping Yandex corner the fast-growing Russian web market.

“Facebook is the same thing. It’s just to what extent you believe Facebook will grab the space. I believe Facebook will be large. But the question is, how far they could go?”

Such is the hubris of an investor able to take bets on a big pay day. But not everyone is so bullish. Forrester analyst Josh Bernoff, author of the book Groundswell about social technologies, grumbled that Facebook may piss off its biggest revenue givers, advertisers, by constantly tinkering its advertising technology in search of the holy grail…

“A few months later, they just blew away a whole bunch of what had been in marketers’ toolboxes and said ‘Now we’ve got something better for you!’. Don’t be surprised if, nine months from now, it’s ‘And now we’ve got a new and better way for you to interact!’.

“Just because Facebook has 800 million users, doesn’t mean it will be the dominant company five years from now.”

By that time, of course, investors will already have made their killing. Index’s Rimer told the FT Digital Media Conference he’s sticking with Facebook for now – but he also genuinely believes the hype about the site owning search as well as social…

“There were opportunities for us to sell (our stake) before the company goes public.

“Is it conceivable that Facebook could be more valuable than Google? My sense is that’s a distinct possibility long-term.

So we’re still holding shares – we think that, with the amount of information people are contributing to Facebook on an hourly basis, Facebook itself could provide pretty incredible search results. You could imagine a world in which you couldn’t live without Facebook but you could live without Google.”