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To be fair, FB doesn't need to get $100/user to be worth the $100 billion valuation. Realistically, they need to be making somewhere on the order of $6.7 billi
by cube13 14y ago
To be fair, FB doesn't need to get $100/user to be worth the $100 billion valuation.
Realistically, they need to be making somewhere on the order of $6.7 billion/year to have a "healthy" P/E of 15.
So, assuming that costs scale linearly with profit(they won't), FB needs to really be making around $25/user for the $100 Billion valuation to have a healthy P/E.
- molmalo 14y agoAlso, you should consider that $25 is way different for users from different countries. Its not the same to get that money from someone in the USA than from someone in Brazil (it's second market), India (3rd), Indonesia(4th), Mexico(5th), Turkey(7th), etc... [1] Business in those countries will not pay the same to publish their ads in FB, simply because the expected return will be lower. [1] http://www.socialbakers.com/facebook-statistics/?interval=last-week http://www.socialbakers.com/facebook-statistics/?interval=la...
- cube13 14y agoBut the end result is that they need to get, in pure revenue, $25/user across the entire world. It's an average across the entire user space.