Q: How much is Facebook worth? A: $11.25 billion less than last year.

Davey Winder
Wednesday, 09 July 2008 18:06

IT Industry - Market

Last year, when Microsoft invested in Facebook, the social networking phenomenon was proclaimed to be worth USD $15 billion. This week, according to legal papers, it has been revealed that Facebook itself reckons it is only worth a paltry USD $3.75 billion instead.

How much is Facebook worth? It is, you might imagine, a simple question. After all, big tech companies such as Facebook all but live and die based upon their market valuation once again, now that the dark spectre of the dotcom crash is but a dwindling memory.

Last year Microsoft purchased USD $240 million (AUD $252 million) for a 1.6 percent share in the social networking site, giving it a back of the fag packet valuation of USD $15 billion (AUS $15.753 billion).

But that was then, this is now, and Facebook is apparently worth much less.

Much, much less.

Of course, nobody really believed that original valuation for a moment. It was like a reverse engineered Dr Evil moment from the Austin Powers movies. And when I say nobody, I include without any shred of evidence companies like Microsoft and people like Facebook founder and CEO Mark Zuckerberg. I mean, they would have to be totally insane to think that it was.

Not that you will hear them say as much, of course.

Which is why a Sydney Morning Herald report, via the New York Times, is so interesting. This deals with a recently settled court case between a Harvard University dating site called ConnectU and Facebook.

It's all a little complicated and a lot messy, but the gist of it is that the ConnectU founders accused former employee Zuckerberg of stealing their idea when he started Facebook and the lawsuits were launched.

What happened in court, and does anyone know how much Facebook is really worth? Read on to find out...

CONTINUES