4 ms·

Wow... neat list. FB is not more valuable than BMW, AIG or Nokia. There's just no way. And if it turns out that they are, then something is fundamentally wrong.

• dantheman 16y ago
  Why? I barely use facebook and it's more important to me than BMW or Nokia, and AIG should be out of business (but that's another argument). I assume facebook is more important to most people than BMW or Nokia, and though the value may be less per person it could be easily be more in aggregate.
  • 16s 16y ago
    I would think that hundreds of years of engineering (mechanical and electrical) and solid products used all across the globe would be more valuable than a social website, but maybe I'm wrong.
    • rospaya 16y ago
      You are presuming the stock market is somehow fair.
      • 16s 16y ago
        Yes, you are right. I was confused. BMW engines deliver pigs to markets so people can eat. One can buy and sell virtual pigs on FaceBook by playing Farmville. To me, actual bacon is more valuable than pretend bacon.
        • justin 16y ago
          How "important" work is is only one factor in the creation of value. How much you produce, how it is valued by other people, what your margins are, what your future revenue streams will be -- these things are all factored into company value. There are many companies that make non-essentials that are valued more highly than farms and utilities.
          • wlievens 16y ago
            Exactly. Not to mention the fact that facebook is near monopoly status. If you were to add every single car manufacturer together, surely you'd get a much high valuation. If the social network space were as diverse (in terms of relative player weight, not total number of players), we wouldn't be having this discussion. Facebook's valuation reflects the value of the social-networking market perhaps more than its value as a single business?
      • robryan 16y ago
        Still it's hard to say that a company that makes well under a dollar a user is worth more than someone with a profit margin of many thousands on each sale. That said though a lot of the companies I know on this list will probably face game changes in their industries soon.
    • lbrandy 16y ago
      I would think that hundreds of years of engineering (mechanical and electrical) and solid products used all across the globe would be more valuable than a search website, and I would definitely be wrong.
      • rottendevice 16y ago
        You could easily argue that about a hundred years of engineering have gone into computer science, and many, many more than that into mathematics and algorithms. And this is the stuff that Facebook is built off of. Also, Audi is certainly not the only player in town when it comes to automobile makers. On the flip side, Facebook has hardly any serious competitors right now, and no one seems likely to catch up any time soon. If we're using cars as an analogy, Facebook has basically created the Model T of online communications, and it will take a while before other car companies can come along and steal market share. Wouldn't that sound like a sweet deal if you were an old and not-so-tech-savvy investor?
    • muhfuhkuh 16y ago
      Isn't that simply debasing the value of all internet and software technology companies, then? None of them are older than BMW, and none of them make engineered steel products. Yet, I'm very sure that more people use Facebook and, say, Windows, than own a BMW.
      • ijuhyftgreduy 16y ago
        But the people that use facebook pay facebook $0 The people that use BMW pay BMW $50,000 Lose money on every customer but make up for it in volume is not a sustainable business model
        • muhfuhkuh 16y ago
          Somehow I highly doubt facebook is losing all that much money, hence their valuation. They're making it up on volume ad sales.
        • justin 16y ago
          ... aggressive use of basic arithmetic is required to understand Facebook's model compared to high cost, physical goods. If Facebook makes $.10 in advertising off 500m people a month, and each person costs $.05 to serve, that is $25 million / month. If BMW makes $50,000 / car but only sells 1,000 cars a month, and each costs $25k to make / ship / sell then they are only making $2.5 million / month. Clearly both companies make more than that, but this is an illustration of how selling high cost goods might not be as profitable as a website used by 10% of the world.
          • ijuhyftgreduy 16y ago
            Facebook has revenues of $500M/year - which allows them to be cash flow positive, no word on how much profit. To be worth $50bn, 100x as much, it needs to find 100x as many users or earn 100x as much per user. BMW has $50Bn of earnings for selling 1M cars/year to make twice as much it simply has to sell 2M cars
            • 16y ago