How Revenue Growth Can Justify Facebook's Big Price Tag

facebook dollar sign How Revenue Growth Can Justify Facebook's Big Price TagThe rich premium attached to Facebook’s recent $50 billion valuation — a high price with respect to earnings that few companies can match — may be justified if the company can grow revenue at a rapid clip, according to analysis by research firm Trefis published by DealBook:

Trefis currently puts Facebook’s worth at a (relatively) modest $45 billion, but the firm says there are four likely developments that could push the social network’s value to $125 billion: a doubling of ad revenue per page; page views increase by 50 percent; Facebook’s share of the search market hits 10 percent; a doubling of game revenue per user.

Trefis also offers an interactive tool, so readers can take their own stab at valuing the social networking site:

mtaylor [at] observer.com | @mbrookstaylor

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