Among the myriad questions swirling around Facebook’s imminent IPO (other than “when will it actually happen?”), the two most pressing are: 1) Can the social network actually support an assumed $ 100 billion valuation? and 2) How?
BIA/Kelsey sought to answer both by pairing financial modeling and strategic analysis. We recently published a comprehensive report exploring the financial drivers that can spur Facebook’s valuation, and the potential growth opportunities that it can unlock to build a business that meets the hype. The report can be purchased here.
Our takeaways: Yes, Facebook can eclipse $ 100 billion in fair market value, but to do so it must demonstrate strong revenue expansion while maintaining a robust EBITDA margin. This will necessitate rapid expansion of its existing advertising business, but also shifts into adjacent advertising sectors and even transformative new businesses such as off-network payments and content distribution/syndication. In other words, the path to $ 100 billion is far from straight.
This Wednesday, May 2, at 3 p.m. EDT, BIA/Kelsey analysts Matt Booth, Jeanne Dattilo and I will present our financial and strategic analysis in a public webinar. We’ll also welcome CEOs from high-profile companies that work closely with Facebook to share their vision for how the network will evolve its business, and the implications for the interactive local marketplace. Our guest speakers are:
– Victoria Ransom, CEO, Wildfire
– Niel Robertson, CEO, Trada
– Peter Vogel, Cofounder, Plink
You can register for the webinar here.