3 ms·

Can anyone get profit/revenue to valuation ratios on pre-IPO Google so that we can do some more rational comparing?

by alnayyir 16y ago

michaelchisari 16y ago
At it's highest, I recall Google's was around 100:1. This puts Facebook's at 250:1.
- nano81 16y ago
  Correct me if I'm wrong, but it looks like you're using (rumored) 2009 income numbers with the Jan. 2011 valuation in your calculation. Income surely would have changed since then.
  - michaelchisari 16y ago
    Yes, that's true. Assuming 2009's valuation of 25 billion, that would mean a P:E ration of 125:1.
- grasshoper 16y ago
  You're comparing their 2010 year-end valuation with their 2009 year-end net income... In December 2009, Facebook repurchased shares at $25 for an implied valuation of $11 billion. That's a 55 P/E.
kondro 16y ago
How would this be rational? Facebook is not Google. Google's primary market (search) is nothing like Facebook's (personal communication).
- Pyrodogg 16y ago
  Both of them market in advertising. The delivery method is different, but it's still advertising.
  - kondro 16y ago
    That's like saying that because Fry's and The Olive Garden both accept cash that they are in the same business. Just because Facebook and Google both make money by selling advertisements doesn't mean they are in the same market. For example, Google makes so much money from advertising because they can show users ads pertinent to their search query at the point they are often making a buying decision. However, Facebook users are on the site because they bored or communicating and not even considering buying something. Not to mention that a large portion of Facebook users have very little discretionary spending money or ability to purchase online anyway. The market and motivation involved between the two companies is completely different and not comparable.
    - skbach 16y ago
      Bingo! I purchase a lot of online ads, and I can tell you, I give nearly all my ad budget to Google. I tried Facebook for a while, with the exact same ads and the exact same product, and the result was shocking. Nearly 10x less conversions than with Google. I think the reason is simple. Google users were already searching for me, facebook users were just bored looky-loos. When people start to realize this about fb it could be the short of the century.
- alnayyir 16y ago
  >more rational

Can anyone get profit/revenue to valuation ratios on pre-IPO Google so that we can do some more rational comparing?

michaelchisari 16y ago

At it's highest, I recall Google's was around 100:1. This puts Facebook's at 250:1.

nano81 16y ago
Correct me if I'm wrong, but it looks like you're using (rumored) 2009 income numbers with the Jan. 2011 valuation in your calculation. Income surely would have changed since then.
- michaelchisari 16y ago
  Yes, that's true. Assuming 2009's valuation of 25 billion, that would mean a P:E ration of 125:1.
grasshoper 16y ago
You're comparing their 2010 year-end valuation with their 2009 year-end net income... In December 2009, Facebook repurchased shares at $25 for an implied valuation of $11 billion. That's a 55 P/E.

kondro 16y ago

How would this be rational? Facebook is not Google. Google's primary market (search) is nothing like Facebook's (personal communication).

Pyrodogg 16y ago
Both of them market in advertising. The delivery method is different, but it's still advertising.
- kondro 16y ago
  That's like saying that because Fry's and The Olive Garden both accept cash that they are in the same business. Just because Facebook and Google both make money by selling advertisements doesn't mean they are in the same market. For example, Google makes so much money from advertising because they can show users ads pertinent to their search query at the point they are often making a buying decision. However, Facebook users are on the site because they bored or communicating and not even considering buying something. Not to mention that a large portion of Facebook users have very little discretionary spending money or ability to purchase online anyway. The market and motivation involved between the two companies is completely different and not comparable.
  - skbach 16y ago
    Bingo! I purchase a lot of online ads, and I can tell you, I give nearly all my ad budget to Google. I tried Facebook for a while, with the exact same ads and the exact same product, and the result was shocking. Nearly 10x less conversions than with Google. I think the reason is simple. Google users were already searching for me, facebook users were just bored looky-loos. When people start to realize this about fb it could be the short of the century.
alnayyir 16y ago
>more rational