Facebook is due to float on the US stock exchange soon, and the first valuation is now in.
The massive social networking site has been valued at between $85 billion and $96 billion, dwarfing the $1 billion Mark Zuckerberg paid for Instagram last month but coming in short of the $100 billion estimated value.
Eight years ago, Google was floated for $24 billion, so the valuation shows just how far things have come in the world of social networking and search. There’s still room for the Facebook valuation to rise further before the sale actually takes place.
The valuation would set it alongside Amazon on the Nasdaq, and Mark Zuckerberg would hold shares worth $17.6 billion. The company will be selling off some of its stock to raise money, and the team say they will be moving more towards app and mobile development once the company goes public. Mark Zuckerberg has kept hold of more than 57% of the voting power when it comes to shareholder decisions, meaning he is likely to steer the company for a few years yet.
The site made $1 billion in profit last year, but some people think Facebook will struggle to keep up momentum as users get bored of the network, in the same way that Myspace’s valuation rapidly slipped once users moved elsewhere.
Mark Zuckerberg has had to justify his expensive decision to purchase Instagram after powering ahead with the purchase almost single-handedly. He said he leapt in once the service gained a critical mass of users, aiming to beat Twitter who were rumoured to be interested in buying the company.
Mark Zuckerberg also says he would be willing to launch Facebook in China. This comes as another service, Evernote, open their own Chinese data centre to try to tap into a lucrative market of Chinese internet users.