Imitation is the best form of flattery, and, financially speaking, Facebook looks a dead ringer for the young Google . It suggests $100 billion isn't a crazy valuation for the social-networking giant. But also that the company will have to stay on its growth path for some time in order for the public to profit from holding its shares.
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CloseFacebook's 2011 revenue of $3.7 billion has increased at an average rate of 118% the past two years, according to its first financial filing published Wednesday. Google was expanding at nearly the same rate once upon a time. Back in 2005, the year after it went public, the search behemoth had $4 billion of revenue, a figure it had grown at a rate of 108% for the prior two years.
Profit margins are very similar as well. Facebook's operating-profit margins have averaged 49% the past two years. Google averaged 48% in 2004 and 2005, a level it roughly maintained until last year.
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