Can Facebook turn 800 Million users into a $100bn business?
It's said that Facebook could be worth $100bn if, as widely predicted, it floats on the stock market this year.
That would make it as valuable as Amazon (in business since 1995) and McDonald's (1940) and twice as valuable as Tesco (1929). But Facebook was launched a mere seven years ago, by then college student Mark Zuckerberg and his Harvard friends.
Can a $100bn business have been created so fast? It may sound incredible, but there are reasons why Facebook just might be worth that much.
First, Google - now worth around $200bn - set a new model for Silicon Valley when it went public in 2004, the year Facebook was founded.It built a global audience before working out how to make money, proving that if you can attract a big enough audience, there will always be ways to "monetise". Ad revenue per user can be tiny and still add up to huge figures. So Facebook's current 800 million users are an extraordinarily valuable asset.
And Facebook has a couple of trump cards over Google.
It's the ultimate "sticky" site, with users spending much longer on it per session - about 30 minutes on average - than people do on Google. That's more time to see and respond to ads.
Everything Facebook is doing to develop as a business, such as the forthcoming personal Timelines, is designed to get people even more hooked.
Zuckerberg says its all about giving users better things to do. "We're not trying to make it so that people spend a lot more time on Facebook," he said. "We want to make it so the time you spend on Facebook is so valuable that you want to keep on coming back every day."
It's said that Facebook could be worth $100bn if, as widely predicted, it floats on the stock market this year.
That would make it as valuable as Amazon (in business since 1995) and McDonald's (1940) and twice as valuable as Tesco (1929). But Facebook was launched a mere seven years ago, by then college student Mark Zuckerberg and his Harvard friends.
Can a $100bn business have been created so fast? It may sound incredible, but there are reasons why Facebook just might be worth that much.
First, Google - now worth around $200bn - set a new model for Silicon Valley when it went public in 2004, the year Facebook was founded.It built a global audience before working out how to make money, proving that if you can attract a big enough audience, there will always be ways to "monetise". Ad revenue per user can be tiny and still add up to huge figures. So Facebook's current 800 million users are an extraordinarily valuable asset.
And Facebook has a couple of trump cards over Google.
It's the ultimate "sticky" site, with users spending much longer on it per session - about 30 minutes on average - than people do on Google. That's more time to see and respond to ads.
Everything Facebook is doing to develop as a business, such as the forthcoming personal Timelines, is designed to get people even more hooked.
Zuckerberg says its all about giving users better things to do. "We're not trying to make it so that people spend a lot more time on Facebook," he said. "We want to make it so the time you spend on Facebook is so valuable that you want to keep on coming back every day."
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