While Facebook already boasts more than 500 million users (the service could be over 600 million by now and Lev Grossman, the senior writer for Time magazine that penned CEO Mark Zuckerberg's profile for the Person of the Year issue, suspects it will reach one billion users by 2012 [video]), analysts anticipate it's user base will continue to make significant gains as the international market opens up. The company is making, off of those users, a fraction of what Google and AOL make on each of their users, according to a piece in Fortune, but when you have one out of every 12 people in the world using your service, it doesn't really matter how much you make off of each one as long as you're making something. In addition, Facebook still hasn't shifted its focus to monetization. Despite a continued laser-eyed approach to growth, the company managed to bring in $2 billion in revenue in 2010, a significant amount more than than roughly $1.3 billion that eMarketer was predicting as recently as mid-August, and more than three times 2009 revenues of $665 million. Back then, before Facebook was making any money at all, investments from Digital Sky Technologies, the Russian firm that went in with Goldman Sachs, already valued the company at $10 billion.
After Procter & Gamble, the world's largest advertiser with an annual budget approaching $10 billion, expressed serious interest in Facebook, other large advertisers started watching the social network. And they should. It's the easiest way -- and getting easier every day as Zuckerberg and his team work to shift how we think about privacy in a digital age -- to reach an incredibly specific group of individuals that is still large enough to warrant the investment of time. (In short, that's the reason why TV Guide magazine is stumbling along with a CPM, the amount that advertisers pay per 1,000 impressions, estimated to be around $10 and other magazines are showing stronger performances. All advertisers know about TV Guide subscribers is that they watch TV. If they want, Procter & Gamble can target 30- to 35-year-old women from Memphis who are bold enough to list "Desperate Housewives" as their only interest.) Facebook will be able to monetize its enormous user base, probably "more efficiently in coming years as its business strategy shifts," eMarketer analyst Debra Aho Williamson told Andy Zaky for a Fortune story.
No doubt, this is a company worth a serious chunk of change. And that's something traders on the secondary market have known for some time. In November, TechCrunch reported that more than $40 million was spent on Facebook shares in a single weekend during a share auction held by SecondMarket, a New York- and Palo Alto-based broker-dealer that uses an online platform to facilitate the trading of illiquid, restricted investments. With 1.9 million shares bought and sold at an end price of $20.76 each out of an outstanding 2.5 billion shares, that weekend trade valued the company at about $50 billion. A couple of weeks later, Sharespost sold 165,000 shares at $25 each, valuing Facebook at $56 billion, according to Business Insider.