Facebook: Bigger than Boeing?

 

That figure works out to about a dollar per Facebook user, which may or may not be a bargain. The investment also effectively values Facebook at $50 billion. That's bigger than Boeing, one of America's largest manufacturers, and almost as big as General Motors, which was the largest company in America for decades.

There are other technology firms out there that are worth even more. Google, for instance, is currently valued at $163 billion, and Amazon.com is worth $75 billion.

Some commentators made much of this factoid the morning the investment became public knowledge. What does it mean for our national economy when companies that don't make anything are more valuable than those that do?

One thing is this: Minds matter. Facebook hasn't yet joined the list of the country's 10 most valuable companies, but Google has. Even though eight of the other nine produce things, and the ninth (Wal-Mart) sells them, many of them rely as much on brains as brawn for their profits and growth, including high-tech companies like Apple and Microsoft. Another is this: Anything that makes it easier for advertisers to sell stuff to lots of consumers at once will be very valuable. At 500 million subscribers worldwide, Facebook has a bigger audience than any other media company, social or otherwise. Something that makes it easier for lots of small advertisers to reach the relatively few people who they want to reach will be just as valuable, and Facebook does that too, thanks to the information it has on its users' likes and dislikes.

Put together, these facts about Facebook may explain why it turns a profit without charging those subscribers a penny for belonging. By the way, that doesn't mean that Facebook subscribers don't shell out money: many of the site's online games offer virtual credits that can be used to gain advantages in exchange for real cash, making those game publishers rich as well.

So perhaps it shouldn't be so astonishing that at least two investors out there think Facebook is worth more than Boeing. It is, after all, the King of New Media.

 

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By Sandy Smith

Sandy Smith is an award-winning writer and editor who has spent most of his career in public relations and corporate communications. His work has appeared in The Philadelphia Inquirer, the Philadelphia CityPaper, PGN, and a number of Web sites. Philly-area residents may also recognize him as "MarketStEl" of discussion-board fame. He has been a part of the great reserve army of freelance writers since January 2009 and is actively seeking opportunities wherever they may lie.