Comparing Pre-IPO Facebook To Pre-IPO Google: Fair, Or A Case Of Apples And Oranges?

He also questions what Facebook will do next to grow revenue further: “Google was widely believed to have much ‘dry gunpowder’ in its back pocket for future growth,” he says, “and was still posting 100%+ year over year revenue growth. Facebook he says has used up much of this “dry powder” over the past year to hit revenue targets, with seven ad slots per page (up from 4 a year ago), permitting paid Sponsored Stories in users news feeds, introducing larger and more intrusive ad formats in Feburary, allowing video, sound and interactivity (survey questions and the like) in its ads, selling ads on its log-out page (introduced in December). “There aren’t many places left to sell Facebook ads,” he claims.

Time spent on Facebook. Sam points out that this is going down, according to data from comScore, and “no increase in number of ad spots can make up for this fundamental fact. Unless Facebook can lure users back more often – such as by purchasing new apps like Instagram – Facebook’s usage growth, and therefore its ad revenue growth are slowing. The very fact that we’re now discussing seasonality as a factor (as if we were speaking about Harrods or Marks & Spencer) should be very concerning to investors, and to its lofty valuation.”

Projected 2012 revenue: Privco’s averaging of analyst reports puts it at $6.7 billion, but after this week’s S-1, Privco thinks it will be closer to $5.41 billion. Privco’s number is based on a 45.5 percent growth rate, “Faster than Q1 to give them some room for upside from newer ad formats making up for some usage and user growth slowdowns,” he says. The $6.5 billion figure, he notes, is based on 75 percent year-over-year growth for all four quarters this year. Given that the first quarter was only 44 percent, “The next 3 quarters would need to somehow make up for that by growing close to triple digits.”