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New Social Local Media (SLM) Advisory Report:

$100B Valuation: Can Facebook Support It … and How?

Executive Summary:

Facebook Valuation Report Facebook’s highly anticipated IPO is expected soon, with a valuation assumed to approach or exceed $100 billion. Some have suggested that no company can become public at such a high value, while others point to the network’s more than 800 million users and robust engagement to justify it.

In this report, BIA/Kelsey analysts model Facebook’s financial performance to evaluate the plausibility of a $100 billion valuation, and then provide strategic insights into the various ways the company may attempt to reach the revenue targets the model presents.

Strategic analysis includes a closer look at how Facebook could migrate into new, transformative businesses such as monetizing its developer platform, building mobile software and hardware, distributing/syndicating content, and expanding payments/e-commerce off-network. The report evaluates the likelihood of Facebook embarking on each of these initiatives, and its prospects of succeeding.

Authors:
Jed Williams, Social Local Media Program Director, BIA/Kelsey
William Redpath, VP, Valuations, BIA/Kelsey

Purchase Report:
$895; $595 Clients
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Who Should Buy This Report and Why

Media, agencies, brands, vendors, rival social networks and anyone else whose market position may be affected — either positively or negatively — by Facebook’s growing presence.

Media, agencies and resellers that must evaluate the growth opportunities and competitive threats Facebook will introduce into the local marketplace across advertising, marketing, services and commerce

Developers and vendors in the social media ecosystem that seek to collaborate with Facebook and need to understand how its evolving business objectives will affect existing or future network relationships.

Market observers curious if Facebook’s massive user base, deep audience data and numerous market opportunities can justify a $100 billion valuation ... and if so, the paradigm shift it may introduce for valuing new media and tech companies.

Report Table of Contents

Facebook: Is a $100 Billion Equity Valuation Plausible, and How Will It Achieve This Level?
     Executive Summary
     Introduction

Financial Model
     Discounted Cash Flow Model
     TABLES:
Historical and Projected Operating Expenses and BCF for Facebook, Inc
Calculation of Net Free Cash Flows for Facebook, Inc
Calculation of Discounted Net Free Cash Flows and Discounted Cash Flow Value for Facebook, Inc.
What Facebook Needs to Do to Be a $100 Billion Company
     Advertising Expansion: Display, Mobile, Search and More Display
          Display
          Mobile
          Search
          Other Advertising Options
          Advertising: Final Thoughts

     Beyond Advertising: New Markets for New Growth
          Monetize Developer Relations
          Content and Payments
          Mobile Hardware/Software

Conclusions

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