I was wrong about Facebook's valuation. Way wrong. Lee Lorenzen was right. Way right.

Back on October 11, 2007, I wrote that Lee Lorenzen was nuts. Back then he said that Facebook was worth $100 billion. He’s getting more and more right every day and I’m getting more and more wrong. Especially after Goldman Sachs just kicked in $500 million and valued the company at $50 billion.

I told Zuckerberg to sell at a $15 billion valuation. Why? I had watched other companies, like PointCast, turn down offers to sell and face doom. But, Zuckerberg and Lorenzen had real vision and I didn’t.

Ahh, always fun looking back at history and seeing just how wrong I was.

So, where do I buy some stock for the IPO? Let’s see, if every user of Facebook buys $100 worth, that’d be a $600 billion valuation at IPO. Can I get in before that happens? :-)


        1. The biggest IPO ever in US history was just the GM one. That came in at $23 billion. I’m pretty sure Facebook will blow that away. I just don’t know by how much.

          1. A lot of bull for sure, a half billion, a billion per employee?
            What does it actually do? A personal home page/web portal, with an address book to your friends, the so-called ‘social graph’.
            Where is it in the history of the information revolution as studied in 100 years time?

    1. more importantly, the way Scobleizer was wrong means that right now, anything Mark Zuckerberg is doing at FBHQ isn’t tedious work, but joyful tinkering along the lines of “I wonder how people will react if I tweak THIS sandbox in this direction for them or that way…”

      Admit it, one guy being very very happy in a not-malicious way, I think that’s worth Scobleizer screwing the prediction up.

  1. Always curious as to how one might see FB as the new Google? Am I to assume that people use FB for search/docs/voice/reader, etc. Or is this just a way of comparing market cap? Just asking…

  2. This might also be a good time to mention that Goldman Sachs were the geniuses who persuade homeowners like you and me in 2007, that property values would simply keep going up for the indefinite future. How’d you make out on that one?

    1. I’m underwater by $200k. So, I keep hoping that a Facebook IPO comes along and helps raise housing prices in the area so I can get even again. :-)

  3. It takes guts to draw attention to your own mistakes. But it is also a great way to build credibility. So congrats on that. But the question is why he was right. Is it just because the number of eyeballs, or because fb has successfully built an application platform? Does the fact that fb has become a platform mean that even if other companies become “the next big thing”, fb will always be underneath, profitable, and irreplaceable?

  4. I think the real news is that the great Scobleizer was wrong!
    I’m impressed that you owned up your mistakes. Not everyone does it. Cheers! :)

    As for Facebook, the writing was on the wall. See graph of no. of users joining per month.& even MS knew it…

  5. Yah, whenever Goldman Sachs can’t screw the Central Bank over and convince them to buy treasuries at a premium, they go after someone else.

    I like your original prediction. I think advertising driven revenue models like Facebook are bound to go nowhere. If you can’t provide real value or something tangible, you’re just vapourware these days. But, I’m happy to be as wrong as people think you were.

  6. bubble alert !!! something is wrong .. how can they grow so fast … $100 B .. really ?! .. I hope they have more then just the advertising model… I’m worry to see goldman sach around…. IPO is in 2011 .. be ready …

  7. This is just the beginning mate, its possible that facebook will reach 100 billion evaluation when they are able to hit 1 billion users which might not be very far away.

    All they need is to try to penetrate the China market which is currently banned.

  8. Allow me to play the contrarian card…Personally, I have to discount the Goldman Sachs bit. Could anything be more self-serving? As if they’d go negative on it and then buy in. My point being, GS is into for the money. Now before you say, “Duh?!?,” my point is, it’s not an investment to them (in the way the rest of us probably think it is). Let’s not be naive, they’re not looking at is holistically. They have a single very simple criteria: Is there opportunity here? Can we get in and out and make a buck? GS is in because they see opportunity. That has very little to do with Facebook itself. The “valuation” of Facebook doesn’t mean boo to GS. So in placing a value on it, they are merely trying to fulfill their own prophesy. GS’ play is that everyone else believe there’s value and so and so on. I saw this because it’s still not clear to me what FB’s biz model really is. Sure, they’re racking up users but where’s the profit?

    Finally, Facebook might be the biggest to date but it’s hard to ignore it’s genetics (i.e., MySpace, AOL, etc.).

    Note: I’m not saying I believe everything I just said. I simply wanted to table a slightly different perspective on the matter. Fair enough?

  9. To be fair many of us thought the same thing likening it to Harry Dent and his Dow 25,000 prognostication.

    BTW: Lee fumbled a little with his heavy investment in Facebook apps. I don’t believe those investments paid off (I could be wrong).

  10. The company’s valuation changed significantly since 2007. It certainly wasn’t worth 100 billion then. Determining when or if to sell is part luck, timing and skill. Mark and Facebook investors chose to hold onto the company, let’s see if their luck holds for an IPO.

  11. I still need to see a revenue model that will trend upward before even getting remotely interested in the IPO. Even with 500 million users (as of July), the total annual revenue was a measly $2 billion.

  12. How much did Rupert spend on his now-defunct social network? What happened to that?

    If you go to $100 billion by putting up plants, or making things, you have something real. It’s a sticky investment. If you go to $100 billion by making the sharks interested, after the IPO, what do you have? 500 million people who can lose interest, or like something else, tomorrow. Goldman will have taken a huge cut, and lots of others will have lost their shirts. As before.