Who actually owns Facebook? Not one, and definitely not Goldman Sachs (or its clients). The power still rests with Facebook co-founder / CEO Mark Zuckerberg, who owns 24% of the company [equivalent to $12 billion] and its employees – – co-founders included – – who own a 45% stake in the company [~ $22.5 billion].
$450 million investment of Goldman Sachs in Facebook bought the funder 0.8% of the company’s shares [$400 million], while its clients already won about 3% [~ $1.5 billion]. The only major share holder left out being Russian investment firm Digital Sky Technologies, with a 10% share [$5 billion].
Why Is Facebook Worth $50 Billion?
Determining a company’s “value” is different from simply calculating how much it makes each year, since this is the number investors use to figure out how much they are willing to pay to get in on the action. It’s determined not just by how much money the company is making now but also by how much it might make in the future. For example, a year before it went public, Google made about $2 billion in revenue. Now, it’s making about $30 billion in sales per year and has a “market capitalization” of about $200 billion (market capitalization is just a measurement of the size of a business). Obviously, investors are hoping that Facebook will be the next Google.
Goldman Sachs hasn’t announced its exact thought process behind the $50 billion valuation for Facebook, but pundits point to a few key factors:
- First, Facebook did pull in about $2 billion in revenue in 2010.
- Of the three biggest websites (Facebook, Google, and Yahoo), Facebook is growing the fastest. You heard us: Facebook is growing even faster than the infamous Google.
- More than any other site, people spend the most time on Facebook.
- Facebook is increasingly conquering the display ad market.
There are new, growing sources of revenue for Facebook, too, such as transaction fees on games by Zynga (the makers of FarmVille). Zynga’s revenues will be about $1 billion this year, and Facebook shaves a cool 30% transaction fee off of that. If Zynga continues to grow, Facebook is golden.
- source: learnvest.com