Facebook, a clever little startup that lets people “friend” each other or something like that, is set to go public on May 18. In advance of its initial public offering, the company led by a plucky, big-dreaming college dropout announced today that it’s worth as much as $96 billion.
That’s not the largest valuation for a company at the IPO stage, the Wall Street Journal reports that it’s also close to current valuations for veteran biggies like McDonald’s, HP and Amazon.
According to the Washington Post, the $96 billion number is worth 24 times the total sales for Facebook’s year ending March 31. When Google went public in 2004, it’s $23 billion valuation was only five times its annual revenue.
But while Google had an established, proven advertising platform to build its business on, some worry that Facebook, while wildly popular, is still an unknown quantity to the people it expects to sell to.
“The bigger issue [with Facebook] is the core business,” one analyst tells the Journal. “There’s still no good understanding for what advertisers are paying for.”
Regardless, Mark Zuckerberg and crew expect to sell off 337.4 million shares at $28 to $35 each.