- The Big Picture - http://www.ritholtz.com/blog -

Uh-Oh: Facebook’s Zuckerberg is Time Man of the Year

Posted By Barry Ritholtz On December 17, 2010 @ 7:20 am In Contrary Indicators,Psychology | Comments Disabled

Let’s put aside the obvious issue with this cover — why Wikileaks founder Julian Assange was the better choice, and that Time magazine editors are a spineless eunuchs — and look at the psychology and market connotations of this year’s Man of the Year choice.

[1]It is somewhat fitting that a decade after Time marked the very top of the internet bubble by putting Amazon’s founder, Jeff Bezos on the cover as person of the year in December 1999 [2], this year, they opted for Facebook’s founder as their 2010 Person of the Year [3].

If history holds, TIME has just marked the top in the value of Facebook — at least for the foreseeable future. The Bezos cover marked the high point in Aamzon.com’s stock for the next 10 years.

Understand the psychology of why this is: By the time any phenomena reaches the editorial room meetings of a major non business publication such as Time, it is already a widely held social factor. (1999 Example: Buying books and other gadgets on the internet? Why you don’t say– that’s ingenious!)¬† Ubiquitous Facebook has 500 million users, is now at the point where its early and middle adopters are cringing as their parents sign up and “friend” them.

From a financial perspective, the mostly, kinda/sorta eventually efficient market [4] has already reflected this. Facebook isn’t publicly traded, but its theoretical value has been pegged as high as $33 billion [5] dollars, based on his paper donation to the Newark school system. In June of 2010, Elevation Partners paid $120 million for an implied valuation of $23 billion. Microsoft’s 2008 investment of $240 million was at the $15 billion level.

Given the challenge in monetizing that massive user base, $33 $58.75 billion seems pretty rich. Time will tell if, like Amazon, Time just marked a decade long top in Facebook valuation. History suggests that its a pretty good bet it did.

What this means for the broader internet valuation and Web2.0 is yet to be determined . . .

A Decade Before Amazon Regained its TIME Top



UPDATE December 17, 2010 9:22am:

I am told that the value of Facebook is now $58 billion plus,based on 2 million shares changing hands at $23.50 out of a reported 2.5bn shares — that out across the various classes. 85.75 billion dollars . . .

UPDATE 2 December 22, 2010 10:41am:

Paul Kedrosky reports FB is now at $67 billion dollars. [7]


Magazine Cover Indicators [8]

Person of the Year 2010: Mark Zuckerberg [3]
Time  Dec. 15, 2010



Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2010/12/uh-oh-facebook-founder-zuckerberg-is-time-man-of-the-year/

URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2010/12/bezos.png

[2] December 1999: http://www.time.com/time/magazine/article/0,9171,1904142,00.html

[3] 2010 Person of the Year: http://www.time.com/time/specials/packages/article/0,28804,2036683_2037183,00.html

[4] mostly, kinda/sorta eventually efficient market: http://www.ritholtz.com/blog/2004/11/the-kinda-eventually-sorta-mostly-almost-efficient-market-theory/

[5] $33 billion: http://dealbook.nytimes.com/2010/09/28/sorkin-the-value-of-a-piece-of-facebook/

[6] Image: http://www.ritholtz.com/blog/wp-content/uploads/2010/12/AMZN-big.chart_.png

[7] $67 billion dollars. : http://www.bloomberg.com/blogs/paul-kedrosky/2010/12/could_facebook_save_california.html

[8] Magazine Cover Indicators: http://www.ritholtz.com/blog/?domains=http%3A%2F%2Fwww.ritholtz.com%2F&sitesearch=http%3A%2F%2Fwww.ritholtz.com%2F&cx=015905226837203657063%3Ax1cwdcykvvw&ie=UTF-8&oe=UTF-8&cof=FORID%3A11&s=Search&q=Magazine+Cover+Indicator&sa.x=26&sa.y=19#1533

[9] Image: http://www.ritholtz.com/blog/wp-content/uploads/2010/12/poy_cover_z_1215.jpg

Copyright © 2008 The Big Picture. All rights reserved.