I know everyone keeps pointing to the 100:1 P/E but with 900 million active users that is more than 100 bucks per user. Is the average FB user worth 100 dollars to FB?
If your math is right, then yes I think anyone would agree that the mind share of each active user on FB is worth even more than $100 bucks.
But, the problem is they have not proven they can monetize those users efficiently and effectively yet.
I remember when everyone questioned how Google was going to monetize on their traffic and they figured it out and hopefully FB will too.
The one interesting thing that is a big difference between Google and FB though is that Google had "traffic" and FB has a group of people hanging out so to speak. You would think that FB has the better potential to maximize monetization of customers, but how remains to be seen.
To be fair, FB doesn't need to get $100/user to be worth the $100 billion valuation.
Realistically, they need to be making somewhere on the order of $6.7 billion/year to have a "healthy" P/E of 15.
So, assuming that costs scale linearly with profit(they won't), FB needs to really be making around $25/user for the $100 Billion valuation to have a healthy P/E.
Also, you should consider that $25 is way different for users from different countries. Its not the same to get that money from someone in the USA than from someone in Brazil (it's second market), India (3rd), Indonesia(4th), Mexico(5th), Turkey(7th), etc... [1]
Business in those countries will not pay the same to publish their ads in FB, simply because the expected return will be lower.
