One of these people said the company is on track to exceed $2 billion in earnings before interest, taxes, depreciation and amortization, or Ebitda, in 2011. That is above the numbers from Facebook that circulated several months ago when Goldman Sachs Group Inc. and Russian investment firm Digital Sky Technologies invested in the closely held Internet company.
This person wouldn't say by how much Facebook might beat that earnings guidance.
Goldman's and Digital Sky Technologies' investment reported early this year was at a share price that implied a $50 billion valuation for Facebook. The people familiar with the company's recent finances said they thought its profit was growing at a fast-enough clip to justify a valuation of $100 billion or more when it goes public.
That would make Facebook one of the largest technology companies, and eclipsing Amazon.com Inc. and Cisco Systems Inc., among others.
Those citing this big number cautioned that assessing Facebook's value is difficult because, besides objective matters such as earnings potential, much depends on market sentiment and the overall economic mood at the time of a public offering. There is scant public information on Facebook's financials. Given that, some venture capitalists, investors and bankers privately express surprise at what they perceive as astronomical valuations.
The valuation frenzy was particularly triggered by the $1.5 billion investment from Goldman and Digital Sky Technologies. Since then, investors have competed to buy shares of the still-private company on the secondary market. On that market, Facebook valuations have fluctuated wildly, but have recently traded at around $70 billion. A spokesman for the Palo Alto, Calif., company said, "We're not going to participate in IPO-related speculation."
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