Facebook: Fad, Frenzy or the Future?

Update 11/29/07: Since we originally conceived  of this session, we’ve had a kind offer by our good friend Lee Lorenzen to do a keynote specifically addressing the valuation issue. Obviously, Lee has one perspective that others do not necessarily share, and so we will still discuss valuation in this session.

But more importantly, we will be discussing the implications of Facebook’s new features — and the response by the community — for the site’s valuation. We’ll discuss the $240 million deal with Microsoft and how that matters. And we’ll try to get a handle on just how big (or not big) this Facebook thing really is.

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Is Facebook really worth $10 billion? That’s the question that’s been roiling the blogosphere since last week’s news that Microsoft was in talks to acquire 5% of the site at a cost of $300 million to $500 million. The announcement has been met with tremendous skepticism by analysts who say that Microsoft’s interest now puts Silicon Valley at “Delusional Level Red. Or green, given all the cash that is being shoved in Facebook’s direction now.”To recap: Microsoft’s interest in Facebook is largely due to the heated battle between Google and Microsoft for online advertising dominance. Microsoft may well be paying a premium to keep Google out of the running for a stake in Facebook.

So, with modest profits of a reported $30 million this year, does Facebook really measure up? We’ll be discussing this important question at the Web Community Forum this December in a session called “Facebook: Fad, Frenzy or the Future?” We’ll also be asking:

• If Facebook’s potential really is worth $10 billion, why?
• If it’s not worth $10 billion, what will it need to do to become that valuable?
• Will facebook ever be worth $10 billion or more?
• What will we all be saying about this in 2 years?

What do you guys think of this session? What other questions should we be asking? Leave us a comment.

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