Why Facebook will be worth a half trillion by 2015: the mobile and open graph revenue it’s leaving on the table

Lots of people think Facebook is overvalued, at about $100 billion (it just released their S1, announcing its IPO).

But in talking with developers, like I did with Foodspotting’s founder, Alexa Andrzejewski, and in reading the S1 I see that Facebook has left most of the potential revenue on the table.

That makes me think that the folks crying “overvalued” are nuts.

Check that interview out, Foodspotting is one of the hottest San Francisco startups, aimed at people who are looking for better places to eat. Here it is from just this morning:

See, Mark Zuckerberg is sandbagging us. He hasn’t focused on revenue. Here’s what he means:

1. He has hundreds of millions of “MAU’s” (Monthly Active Users) who are using mobile. Facebook has not made a dime off of those so far. That won’t continue for long.

2. Open Graph is only one way. Companies like Foodspotting push information INTO Facebook, but they don’t get value out. Developers, like Foodspotting, tell me they are hearing rumblings that Facebook is developing a new kind of advertising. One that looks sort of like Ad Sense, but that push ads out to Open Graph partners. Spotify, for instance, has pushed five billion songs INTO Facebook. Imagine when Facebook pushes ads OUT to Spotify!

Add these two things together and I can see Facebook getting 10x the revenues that they are today. Possibly within 24 months. That would be extraordinary growth, and that growth will translate into huge stock growth over the next few years.

This is Zuckerberg’s brilliance. He has always played investors like a fiddle. Remember when he got Microsoft to invest while not giving up much equity? This is the same thing he’s doing to investors now. He’s going to take all of our money for not much equity and then he’s going to pour on growth and watch things go nuts.

Watch his 28% stake in Facebook to grow from around $25 billion to $100 billion or more by 2015.

Oh, and we haven’t even talked about China. Zuckerberg learned Chinese over the past 18 months. You think he’s not interested in blowing open that market somehow?

About Robert Scoble

As Startup Liaison for Rackspace, the Open Cloud Computing Company, I travel the world with Rocky Barbanica looking for what's happening on the bleeding edge of technology and report that here.

26 thoughts on “Why Facebook will be worth a half trillion by 2015: the mobile and open graph revenue it’s leaving on the table

  1. I have never clicked on a FB ad….and there is good reason for it. When I use Google, I’m searching for something specific, hence, I am more likely to click on relevant ads based on that search. But when I use FB, I’m not really searching but rather checking wall postings, status updates, and photos from friends. The amount of time a user spends on FB is not directly correlated to how often they click on ads, if it were, Google would have been dethroned already… unless FB can figure out how to incorporate search within the site, they won’t be able to catch Google on profits from ads.

  2. I was just thinking the same thing a few days ago when Facebook announced the upcoming IPO. Even if the valuation makes no sense now at a high number such as 100$ Billion, I still see it grow rapidly in the next few years. I don’t think it’ll reach 500$ Billion by 2015, but anything is possible.

  3. Open graph is only going to grow. I discover music and most of my news using open graph. It may annoy people but, like all other Facebook updates, soon it will be the “old Facebook” and people will be begging for it to come back.

    Great article BTW, I agree.

  4. Open graph is only going to grow. I discover music and most of my news using open graph. It may annoy people but, like all other Facebook updates, soon it will be the “old Facebook” and people will be begging for it to come back.

    Great article BTW, I agree.

  5. Rob, I think Open Graph Apps are graphs are going to be major release . Plus with Ad Words like Advertising , I think Amazon Will be in serious trouble if Facebook opens its own store. Also, If added one or two major features on top of Open Graph, I think users would not want to post on Google+

  6. Really, Open Graph? Have you not noticed the vast majority of Facebookers hate it and don’t use it? How many of the people enjoying their free Spotify will continue using it when the free trial ends? You think advertising on their mobile app won’t evoke outrage and turn users to third-party apps that make nothing for Facebook? They’re going to be the new MySpace.

    1. You are absolutely wrong about that. Spotify told me they have pushed five billion. BILLION. Songs through Open Graph in just a few months. Someone is using it and loving it.

    2. You are absolutely wrong about that. Spotify told me they have pushed five billion. BILLION. Songs through Open Graph in just a few months. Someone is using it and loving it.

    3. Yahoo News told me they have seen millions of new views because of Open Graph, too. Foodspotting says they are seeing lots of growth because of it. So, your experience and opinions DO NOT MATCH with the DATA. Thank you have a nice day.

    4. Yahoo News told me they have seen millions of new views because of Open Graph, too. Foodspotting says they are seeing lots of growth because of it. So, your experience and opinions DO NOT MATCH with the DATA. Thank you have a nice day.

      1. Well, when the DATA is what anonymus people have told YOU and ONLY YOU we’d have to agree that it’s pretty difficult for anybody but you to match anything.

      2. The plural of “anecdote” is not “data”!

        (Sorry, couldn’t resist using my favorite current expression)

  7. Why doesn’t FB just charge $1.99 per month for their mobile app.  If 50% of the people on FB subscribe that’s 800mil dollars per month in income, or about 10bil a year.  Think anyone would care that instead of 76.96 being their monthly cell bill, it’s 78.95?  No.

  8. Facebook.cn?  Doubt it since it’s already blocked in China. I saw some speculation that it would get integrated into Baidu but with censorship such an issue it’s hard to know if it will be successful. Interesting points on revenue though.

    1. Right. I talked over the weekend with Kai Fu-Lee who used to run Google in China. He doesn’t think Facebook will break into the Chinese market either. But what if Zuckerberg bought a company in China with his $5 billion in cash that the iPO will raise?

  9. A little annoyed with Facebook honestly. I totally moved over to Google+ now. I would have to say though, good on Zuckerberg on monopolizing social networking. I’d +1 that.

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