As long as investors keep throwing cash at Facebook, the world's largest social networking site will continue to increase in value, even if only in theory.
The latest valuation of Facebook sits at $50 billion, an obscenely high number based in part on an investment from Goldman Sachs. The U.S. investment bank, along with an Russian investor, just pumped $500 million into Facebook, officially making the site worth more than eBay, Yahoo, and Time Warner, The New York Timesreports.
NYT says the influx in cash puts Facebook in a better position to lure some of the tech industry's best talent away from companies like Google, which is something we've seen already. It also underscores the growing strength of social networking in general.
"When you think back to the early days of Google, they were kind of ignored by Wall Street investors, until it was time to go public," said Chirs Sacca, an angel investor in Silicon Valley who is a former Google employee and owns a stake in Twitter. "This time, the Street is smartening up. They realize there are true growth businesses out there. Facebook has become a real business, and investors are coming out here and saying, 'We want a piece of it.'"
Despite the high valuation, it's still unclear how much the company would really be worth in the public market. And while Zuckerberg and company keep the performance numbers a secret, NYT says the site could be pulling in as much as $2 billion annually.