"I would say $50 to $60 billion would be the ideal valuation,
considering the future is uncertain," Mr. Chowdhry said.
In terms of new revenue streams, Facebook has an expanding
"Payments" business, composing about 15% of 2011 revenue. It takes
a cut of transactions made through its virtual currency of
"credits," the majority of which come from Zynga. And Facebook is
expected to begin delivering ads to its 425 million mobile users
this spring, possibly before it goes public, though it will need to
exercise restraint so as not to disrupt the user experience, said
It's also recently begun to tap the local online-ad market in a
much bigger way, courting small businesses and working with big
brands such as Walmart Stores,
Baskin-Robbins and Cinnabon to execute a Facebook presence for
Spending on targeted local display ads doubled from $1.5 billion
in 2011 to $3.1 billion in 2013, according to Borrell Associates.
Borrell predicts Facebook, which introduced ZIP-code-level
targeting in September, will be a beneficiary of that surge.
Facebook has also been positioning itself to benefit as small and
midsize businesses move ad dollars to the web. Last month it
announced a program that will distribute $130 in free advertising
credits to 50,000 Western European businesses; it introduced a
similar program to dole out $50 credits to 200,000 U.S. businesses
Facebook also opened up its Ads API to all developers over the
summer, which will uncork spending by small businesses. The API
makes scaled Facebook ad-buying easier for marketing agencies.
"They're enabling those who ... work with a fleet of local
clients to manage campaigns with greater effectiveness and
efficiency," said Jed Williams, a social-media analyst at
Facebook is also helping big brands execute experiences locally.
Walmart leads the way with its "My Local Walmart " app, launched in
October. It contains pages for 3,500 unique stores and enables
users who have put in their ZIP codes to have information on
discounts, new products and in-store events delivered to their news
Retail brands can also target Facebook ads to sets of consumers
who've "liked" a store's Facebook Places page, said Chris Tuff,
senior VP-director of earned and emerging media at the
retail-centric agency 22squared.
If a store location's sales are down, "why aren't we trafficking
social ads to that specific location with a coupon attached, or
just a 'sponsored story'?" he asked, noting local targeting will
become more compelling when Facebook enables mobile ads.
For Facebook, local targeting is a way to boost ad pricing.
Hyper-local targeting, across the board, tends to be eight to 10
times costlier on a cost-per-click basis than national targeting,
Mr. Tuff said. He believes it's worth it.
Baskin-Robbins, a 22squared client, worked with Facebook this
fall to set up "parent-child linking," a new function where
Facebook connects individual "Places" pages--a simplified version
of a fan page--for each of a national marketer's local affiliates
to the brand's corporate page. It enables brands to administer
those local pages centrally, setting up check-in deals and
Third parties have also sprung up to help national brands manage
their local Facebook presences. Chevrolet, in a lead-up to the
Super Bowl, worked with franchisee-marketing platform Promoboxx to
get dealers on-board with its national and local Facebook strategy.
In the first week of the program, about 1,200 dealerships opted
into an app developed by Promoboxx, which served national content,
including the automaker's Super Bowl spot, to their Facebook pages.
They were also given a content schedule with suggested post dates
and times, which they could choose to follow or not.
Carolin Probst-Iyer, Chevrolet's digital manager, said the
campaign marked Chevy's first foray into thinking strategically
about content for all of its local Facebook pages. And while it
didn't involve any paid media, Ms. Probst-Iyer said it's a viable
possibility for future campaigns.
"You can run paid media on Facebook.com, or very soon,
hopefully, on Facebook mobile ... saying 'We know you live close by
to a Walmart or a Cinnabon, go there and check in to get a deal,'"
said Rob Reed, CEO of MomentFeed, a location-based marketing
platform. "And you're also volunteering valuable data about