100 World’s Most Valuable Startups

Posted: September 24, 2010 in Uncategorized
1. Facebook

Image: Facebook.com

Estimated Value: $25 billion

Last Year’s Rank / Valuation: #1 / $6.5 billion

Business: Facebook is the largest social networking site in the world with more than 500 million users, up 66% from 300 million users last year. According to Compete, it’s the third largest web property based on unique visitors.

Location: Palo Alto, California

More Info: About Facebook

CEO: Mark Zuckerberg

Investors: The company has raised more than $400M in funding since 2008. Microsoft ($246M), Hong Kong billionaire Li Ka-Shing ($60M), Greylock Partners and Meritech Capital Partners ($25M), Accel Partners ($12.8M), PayPal co-founder Peter Thiel ($500,000), European Founders Fund ($15M), Digital Sky Technologies ($200M) and TriplePoint Capital ($100M).

Analysis: Facebook is dominating the Internet. It has left a wake of waning competitors in its path (MySpace, Ning, Bebo). It just replaced Google as the number one destination users spend most of their time. Revenue last year was estimated at around $700 million with branded and performance advertising comprising the bulk. The company has had considerable success selling ads due to its size, brand, and ability to develop products like engagement ads that interact with users. Facebook is also rumored to deepen its search relationship with Microsoft by mining anonimized data from consumer usage, illustrating the importance of Facebook’s massive information-generating audience, not too mention likely pissing off Google.

Mark Zuckerberg has stated that 2010 revenue estimates of between $1 billion and $1.1 billion “are not so far off.” If we take the conservative end of that range and apply a 25x multiple due to its incredible growth, emerging market segments, low cost of goods, app platform and advertising and gaming potential, we get a $25 billion valuation. Additionally, Elevation Partners recently purchased 2.4 million shares in the secondary market implying a valuation of $23 billion. Shares are trading as high as $34 billion on Sharespost, a whopping 30x estimated sales and more than eBay’s market cap.

See rest of the bunch go to —-> http://www.businessinsider.com/digital-100#1-facebook-1

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