Okay, so I admit the headline was a bit silly. But some people are going around saying that targeted ads and such will make Facebook worth that much and its something worth looking at.
How would you have valued Google before Adsense and Adwords proved themselves?
They were still the sickest search engine at a time when search was the biggest money maker on the web. Also, people have a bad memory about Google, but they didn't IPO until they were making a billion dollars.
The most interesting, underutilized and least known aspect of Facebook's platform, imho, is the fact you can export Facebook data to other sites and other communication systems (albeit in a limited way). O'Reilly's been blogging about this lately.
"I do think that there are two views of the social graph, though, and how it gets deployed: there's a platform view in which it can be exploited to build smarter applications on Facebook; there's a deeper view in which the Facebook-discovered social graph can be accessed by other applications elsewhere on the net. Facebook's granular control of what information you reveal and to whom is thus a key part of the platform -- but the question is how far Facebook will go in letting other sites use this information. If Mark's answer is the first, Facebook is ultimately a closed platform; if the latter, it becomes a true open platform and value enabler."
The Economist article also confuses news feeds (your friends actions, on your FB homepage) and mini-feeds (your own actions, on your profile page). Makes you wonder if the author has actually ever been on to Facebook. Perhaps there's less to The Economist's analysis of Facebook than meets the eye?
http://money.cnn.com/galleries/2007/fortune/0711/gallery.pay...