Why Facebook is Worth Billions

This week, Digital Sky offered to invest $200 million in Facebook at a $10 Billion valuation. What makes Facebook worth $10 Billion? They haven’t found a sustainable business model and lose millions every month, so what makes them so valuable?

It’s because they have YOU. And not only do they have you, but you tell everyone you know about Facebook. For free.

A web company like Yahoo had to spend more than $100 million on advertising with competitors like NBC and USA Today to get their brand in front of you and your friends. Facebook gets you to market their company to your friends and family for free. And your recommendation is MUCH more valuable than what NBC can offer via a commercial. That’s why Facebook is such a great investment. They have you, and you voluntarily market their brand to people you know who trust you and value your opinion.

I’m not saying this to demonize Facebook. On the contrary. It’s brilliant. I’m an active Facebook user. If you are like me, you gets lots of value out if Facebook…keeping up with friends, networking, sharing experiences. It’s fun and may be an important part of your life as it is mine. They’ve got a great product that has helped to make the world smaller and easier to navigate. I just want you to stop and think about why they are worth so much. It’s because they have create a brand that naturally and organically collects people together and gets them to spread the word.

If Facebook is worth $10 Billion because they have us….lets collect ourselves on our own and see how much we can be worth.