Is Facebook Worth More Than Google? (GOOG, RENN, GS)

People thought the bubble in social media was near bursting when Goldman Sachs GS invested in Facebook at a $50 billion valuation. Now we know Goldman is smarter than the rest of us, as Facebook has been recently valued around $70 billion, and Goldman has already made 40% on the trade. With Rennrenn RENN going public yesterday at crazy valuations (100 times revenues), we could see Facebook be worth $20 billion on that metric, which would make it worth more than Google GOOG. Facebook is worth $70 billion according according to recent valuations but many do not believe the $200 billion number. Just because some do not the $200 billion valuation number, does not mean the case can not be made. Online advertising continues to grow rapidly, and advertising across all mediums should be roughly $470 billion this year, according to ZenithOptimedia. If you have margin rates of around 30% (which is not high for online advertising models), a 15 multiple, you get $2.1 trillion. Facebook is the number one site in the U.S., and consumers spend at least an hour a day on the site. Facebook probably gets more than 10% of consumers time on the 'net, which would value Facebook around $210 billion. Goldman Sachs, and other intelligent investors, know that Facebook is going to be a $100 billion company, and perhaps more, should trends continue. In time, Facebook could be worth more than Google, as consumers spend more of their time on the site from Mark Zuckerberg and friends. Not too bad for a college dropout, and a company that's only around 6 years old.