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?