1. I'd probably invest at a valuation of around $100M. Why? Facebook has no road to profitability that they've created. Sure they're popular, but lots of thi

1. I'd probably invest at a valuation of around $100M. Why? Facebook has no road to profitability that they've created. Sure they're popular, but lots of things have been popular and faded into nothing. Geocities, a myriad of search engines, Friendster just to name a few. If Facebook would accept a buyer for less than a billion, they'd be able to unload the site, but the longer they run independently, the harsher the reality is going to become that they have no real plan for making any money. I'm not saying that it doesn't have value - more that it has value that's damn hard to monetize to the point that it's more useful as a piece of someone's portfolio than as an independently profitable product. To clarify what I mean a little: something like Google Maps is a good thing for Google to own even if they loose money on it because it keeps people around and thinking of Google for their needs. 2. Because there are some people that are willing to wager their money on a 1% chance that their money will become 10x larger. It's a terrible bet, but people make it all the time. I mean, if you are investing in Facebook at $15B, really someone has to buy it for a lot more than $15B for it to have been worth the risk and I don't see Facebook selling in the $50-$100B range. The fact is that Facebook is a much riskier investment than a company that has already been in the black. It could potentially just flop as a business. Google might not become as profitable as you expect, but it isn't just going to flop. So, Facebook is this really risky investment that can never sell high enough to justify the valuations they seek. At best, Facebook continues along nicely and makes some money. They aren't the next Google. Seriously, what are the odds that Facebook is going to sell for a lot of money? If you place it at 50%, then you really need to be thinking it will sell for $30B to justify buying in at a $15B valuation. If you place it at 25%, you really need to think it will sell for $60B eventually. And how likely do you think that is? Facebook is more like a YouTube than it is like a Google and what Facebook wants its valuation to be just can't be justified by what it has going for it. Companies will buy popular things just because they're popular in the sub $1B range - sometimes even slightly over that in the YouTube case. But they won't spend the $30B that would justify a buyout to the VC who have invested at a $15B valuation. I mean, those VCs don't just want to break even on their investment. Unless Facebook can find a way to be profitable - and hugely profitable - it just won't be bought for such a substantial amount. A $30B buy would put Facebook at a third of a Google and it just isn't that.