I’ve been trying to comprehend Facebook’s valuation this weekend. $100 billion is a huge number. But just how huge? To try to put this in perspective I looked up the most valuable companies in the world. There are only about 50 companies in the world worth $100 billion or more. This group includes the world’s largest banks, energy companies, and pharmaceutical firms. It includes unique firms like Microsoft, the company that sells the operating system that runs most of the world’s computers and the productivity software used by most of the world’s knowledge workers. It includes Apple, the innovator that changed the music business, the mobile phone business, and created the market for tablets. This group also includes the enduring brand and entertainment giant Disney. And it includes fellow Silicon Valley resident Google, the company that helps most of the world find things on the internet. Quite an exclusive club.
Facebook is the world’s largest social network. More than 10% of the world’s population has a Facebook page. Facebook’s users include most of the people in the world that advertisers care about. These measures make a good argument for putting Facebook in this club. But now that Facebook is in this club, less than six years after the public launch of their product, what now?
Google is trading at around 7x it’s 2004 IPO price. Microsoft is trading at 200x IPO and Apple 100x IPO. And yes, those numbers are adjusted for inflation. To become the most valuable company in the world, a title currently held by Apple at around $500 billion, Facebook needs only a 5x increase. Based on these numbers, Facebook could become the most valuable company on the planet in the very near future.
So how huge is Facebook’s valuation? World domination huge.