Facebook Knows That Imaginary Money Is The Best Kind - The UpStream

Facebook Knows That Imaginary Money Is The Best Kind

posted Sunday Sep 26, 2010 by Jon Wurm

Facebook Knows That Imaginary Money Is The Best Kind

I would like to start off by congratulating Facebook for two reasons. One of which is registering their 500 millionth member in July this year. Whether you like them or not you can't really contest the fact that they managed this only 6 years after starting up in a dorm room back in February 2004. The other reason I want to congratulate Facebook is for another immense achievement of having an estimated "worth" of $33,000,000,000 without actually making any real money.

Hit the break to find out more details about Facebook's imaginary triumphs.

This entire situation sounds oddly familiar. Isn't there another Internet social network out there that is worth lots of money and barely generates revenue let alone profit? Oh yeah, it's called Twitter. You may have heard of it, but the point is that we're seeing some outrageous valuations of companies that rely on outside money to stay afloat. Just three months ago a series of investors injected $120,000,000 into the company, which it will rely on partially to stay afloat until 2011. This makes total investments into Facebook at just under $1 billion. During that year Facebook claims it will be able to make $1.2 billion in revenues. How will they achieve this? Only Facebook and their investors know, and maybe not even them. All investors small and large seem to be intoxicated by some magical potion that makes them all googly eyed over Facebook's prospects.

I understand that even companies like Google didn't make money the first several years of operation but the fact is that they're doing quite well now and the current valuation of Facebook makes Google's solidified success pale in comparison to Facebook's imaginary future success. Either their investors have some very pertinent information not available to the rest of the world or they learned nothing from the dot-com bust back in 1999 and the recent financial crisis. What do you guys think? Am I just being upset or is Facebook getting favorable treatment here?


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