StoutFiles - 5:20 pm on Jan 4, 2011 (gmt 0)
I can't see how you can value a company that doesn't produce a tangible product so much higher than large companies that do. Ask Facebook users if they'd pay a monthly fee to keep Facebook. The majority would not, and without the majority using Facebook, the others wouldn't either. All the traffic in the world doesn't offset the bandwidth costs if the users aren't willing to leave the site via ads. How can you value something so high that doesn't generate a high cash flow and users can and will jump ship instantly?
But isn't Google in the same boat? Yes, and no. People would not pay to use their search, but Google's profit doesn't lie in search, it lies in AdSense and AdWords...on webpages where people are looking to buy things.
I can only imagine that Facebook in the future (or now, possibly) will be selling user data to companies. Its data is the only valuable product they currently have.