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Overvalued At 80 Billion, Facebook Expects 4.27 Billion In Revenue For 2011

Posted on Thursday, Nov 3rd 2011

According to a comScore report released for the third quarter of the year, Facebook accounted for 15% of total online display advertising spend, compared with Google’s and Yahoo’s 10% share each. Within the U.S., Facebook owns 28% market share of all display ads, compared with 23% a year ago. Surprisingly, though, Facebook is ranked fourth in unique U.S. visitors. Google has the most unique visitors in the U.S., followed by Yahoo and Microsoft. However, users spend more time on Facebook than they do on any of these other web portals.

Facebook’s Financials
Facebook’s financial performance has not been made public. However, market reports estimate that the company doubled revenues to $1.6 billion in the first half of 2011. The market expects their current revenue trends to continue; if so, Facebook would likely end at revenues of $4.27 billion this year with $3.8 billion earned as ad revenues and $0.47 billion as Facebook Credit revenues.

The company expanded its user base to reach more than 800 million active users worldwide, of whom more than 350 million log in using mobile devices. Facebook claims that on average, a user on the site has 130 friends and that nearly 400 million users worldwide log in daily.

Despite the stellar performance, Facebook recently confirmed plans to delay their IPO to the end of 2012.

Facebook Expands Mobile Offerings
Meanwhile, Facebook continued to expand the available mobile offerings. Recently, they launched an iPad app to bring the network on one of the fastest-growing handheld devices. The Facebook app for the iPad uses a touchscreen scroll for the News Feed, a swipe to page through albums, and a pinch to zoom pictures. It delivers better quality photos which are bigger and easier to flip through, simpler navigation, faster search and access to more games and chat apps.

Facebook also launched a new messenger for the mobile. The updated Facebook Messenger lets users see a list of their friends who are online and who are on mobile, lets them know when the other person is typing and simplifies messaging. The app is now also available for BlackBerry in addition to being available for the iPhone, including one for iOS 5 and on Android-based devices. They also added support for 22 new languages for Android and 12 new languages for the iPhone.

Facebook’s Acquisitions
Facebook plans to acquire 20 organizations during the current year. They have already acquired 14, and the most recent addition was the Q&A startup friend.ly. The Mountain View–based company makes apps for people to interact with each other on a social network by asking and answering questions . Friend.ly had raised $5 million in venture capital funding to date.

Private investors continued to increase the company’s already high valuation, and it is estimated to be valued at over $80 billion. There seems to be no end to the rising valuation. Venturebeat shows Facebook’s phenomenal growth in valuation since July 2008. I still believe that the company remains highly overvalued, without the revenue to support it. But the market expects their IPO next year to be the biggest one worldwide.

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