Facebook is not what worth its valuation

(written by Lawrence Krubner, however indented passages are often quotes)

Interesting:

But let’s be charitable. Let’s imagine that Facebook miraculously made $200 million this year — a 20% margin. (I don’t think that’s true, otherwise why take another $120 million from Elevation Partners, but hey, let your imagination roam). That would put Facebook’s P/E at some 165.

That’s about 7.5 times as much as Google, the golden cash cow of the internet world. Would you seriously think that Facebook is 7.5 times as good or as promising a business as Google? Get outta here.

No outrageous profits after seven years and half a billion users

Oh, well, but maybe Facebook just needs to mature, you say. If we give them just a few more years, the profit fairy might drop by and sprinkle her billions all over Facebook and its shareholders. I call fat chance.

Facebook has been around for seven years. It has 500 million users. If you can’t figure out how to make money off half a billion people in seven years, I’m going to go out on a limb and say you’re unlikely to ever do.