Facebook's valuation: The cheat sheet

Seriously, how much is Facebook worth? It's been an enigma in tech gossip for years now, as the social-networking company grows bigger and bigger and yet remains privately held. And some of Facebook's most rapid growth has taken place in the midst of a stormy economic climate that could batter any company's balance sheet. So here's a rundown of what tech blogs, news outlets, investors, and Valley gadflies have said thus far about just how much Facebook is worth.

Are all these numbers accurate? In a word, no. Some of them were rumors (albeit decently strong ones, as we've omitted some of the more ridiculous ones), and others refer to Facebook's preferred-stock valuation, which as we learned during its legal tiff with onetime rival ConnectU, that isn't necessarily anywhere close to the company's paper valuation.

One thing that's interesting: Take a look at the trajectory. Facebook's perceived valuation keeps climbing and climbing and climbing right up to its $240 million investment by Microsoft. Then, once the hype dies down (and the market starts to sputter) it tanks. It's not until, perhaps not coincidentally, the departure of chief financial officer Gideon Yu and the stronger likelihood of a new investment round that Facebook's valuation starts to climb again.

What's next? Digital Sky Technologies' investment in Facebook assumed a preferred-stock valuation of $10 billion, and employee stock trades have started at about a $6.5 billion valuation. It's not yet clear how much more the company's worth will fluctuate before, at long last, founder and CEO Mark Zuckerberg and his team decide to take it public. That is, of course, assuming that actually happens.

Playing the Facebook valuation game Everyone's constantly talking about how much Facebook is worth. But how much has that number changed over the past few years? A lot, it turns out. Here's our cheat sheet.
Few thousand	February 2004: Backed by a few thousand dollars from its co-founders, Facebook goes live as a small, minimalist social-networking site limited to Harvard undergraduates.
$10 million	June 2004: PayPal co-founder Peter Thiel becomes Facebook's first outside investor. He invests $500,000 into the 4-month-old social network, which has by now taken its home base of Harvard and a scattering of other elite colleges by storm. Later that year, there are shaky rumors that Friendster--still a major player in U.S. social networking at the time--offered $10 million for Facebook and was turned down.
$100 million	April 2005: Facebook raises a $12.7 million Series A round of funding from Accel Partners. Rumors peg its valuation at about $100 million.
$750 million	March 2006: BusinessWeek reports that Facebook turned down a $750 million acquisition offer and was shopping itself to potential buyers at closer to $2 billion.
$525 million	April 2006: Facebook raises its Series B round of funding to the tune of $25 million. The round is led by Greylock Partners, with contributions from Meritech Capital Partners, and prior investors Accel Partners and Peter Thiel. The company's pre-money valuation is reported to be $525 million.
$1 billion	September 2006: Rumors--which are later confirmed--start to swirl that Yahoo has offered to acquire Facebook for as much as $1 billion.
$8 billion	December 2006: Early Facebook investor Peter Thiel, who fueled the small social network with $500,000 in June 2004, tells Bloomberg that he believes the company is worth as much as $8 billion but says it is not for sale.
$15 billion	October 2007: Microsoft invests $240 million in Facebook at a $15 billion valuation. Although it's not really made clear at the time, the company later clarifies that this investment was in preferred stock and that therefore $15 billion is not the company's actual valuation.
$3.75 billion	June 2008: Previously redacted court documents from ConnectU v. Facebook, the trial in which the creators of a onetime rival social network at Harvard sued Facebook CEO Mark Zuckerberg--claiming he stole their code and business plan--reveal that at this time, Facebook valued itself at $3.75 billion.
$4 billion	August 2008: Reports surface that Facebook, with early employees growing restless about stock options that they thought they could've cashed out by now, is about to launch a program to permit the sale of some vested shares. The internal valuation is said to be $4 billion. By the end of October, rumors start to spread that chief financial officer Gideon Yu was spotted in Dubai, supposedly to drum up interest from new overseas investors.
$3 billion	March 2009: Months later, the Silicon Valley rumor mill still won't stop talking about employees' private sales of Facebook stock--and apparently, the numbers aren't too pretty. The figures tossed around indicate that the stock is trading at a valuation well south of $3 billion. Later in March, Facebook CFO Gideon Yu leaves the company. Persistent rumors hint that he was unable to secure new funding for the company.
$2 billion	April 2009: TechCrunch reports that Facebook received a term sheet from potential investors with a valuation of $2 billion and turned it down.
$4 billion	April 2009: On the same day, VentureBeat reports that Facebook was on the verge of accepting new funding at a $4 billion valuation, but that Zuckerberg said no.
$8 billion	May 2009: The latest rumor is that Facebook turned down yet another term sheet--this one for a $200 million investment at an $8 billion valuation.
$10 billion	May 2009: Later in the month, Facebook finally gets that long-rumored cash. The company receives an investment of $200 million from the Russian firm Digital Sky Technologies at a $10 billion preferred-stock valuation. Also included: a plan to buy back a limited amount of vested employee stock.
$6.5 billion	July 2009: Digital Sky Technologies begins its buyback of up to $100 million in Facebook employee shares. Each share of common stock is selling for $14.77, which assumes a valuation of $6.5 billion for the company.
Source: CNET News research

[andrew.mager]

Good for Zuck, that's a lot of dollars.

[JohnQueuePublic]

Pump it and dump it, Zuck.

[ca5ter]

Swampland

[benjwah]

The company hasn't even made a profit yet has it?

[twofangz]

No profit yet. No solid revenue plan. Have you ever clicked on a Facebook advert ? NO
Good luck investors. Great job Zuck.

[johnny_ray3g]

wow....10 Billion of them thangs'?? LOL much respect for not selling it off......YET. not sure i would have been so righteous with a $10 Billion check on the table.

[cbaisa]

i don't see how facebook hasn't found a way to make money yet. is that real? they are the social networking force in the world. how have they not figured that out yet?