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Posted by Sucharita Mulpuru on February 6, 2012
I was called a Facebook hater last week. No ambiguity. "You're such a hater!" this woman, who happened to be a social media marketer at a large retailer, told me. I will admit, I have reservations about Facebook’s role in commerce which has no doubt made her job more difficult, but I must defend myself. I’m not a hater. In fact, contrary to all the tweets and blogs questioning Facebook’s purported $100B valuation, I actually think the company is worth all of it and probably more. (To those same critics, if Facebook with $1B in profits is overvalued, what does that say about Groupon with about as much in losses? But that’s a discussion for another day.) Here are some considerations:
Eighth down on their list of Facebook’s own risk factors is probably one of the biggest: the potential for government regulation of personal data (ie Facebook’s data). But that’s a long leap because the very nature of a “like” (or any other derivative function) is that it is inherently an opt-in broadcast of one’s preferences. Is Facebook worth half of Google (Google's valuation is now about $200B)? Well, when Google went public in 2004, it had less revenue and was less profitable. Google has since increased its revenues more than tenfold since then. What we do know is that Facebook is an incredibly lean organization that makes more than $1MM per employee, is very profitable, has been very scaleable, and has a long, long way to go before it hits a wall generating revenue or profit.