What is Facebook's magic profit recipe? We may soon find out

Goldman Sachs recently valued Facebook at $50bn. What makes it worth that much is a mystery. But it may soon be revealed.

When I went to see The Social Network, the film about Facebook, I wrote here that I couldn't begin to understand how the company could possibly be worth $25bn. Just goes to show what I know. Goldman Sachs has just put a "super-high and fast-rising" valuation of $50bn on it, says the FT. And this isn't just based on an analyst's "wishful thinking". The firm has also chucked in $375m in cash for a stake. And it is making arrangements for its high-net-worth clients to take and trade stakes in Facebook to the tune of another $1.5bn via a special purpose vehicle.

This is great news for Facebook in that it will allow it to get on with the business of hiring people, developing products and picking up start-ups without the regulatory bother that comes with a listing: no reports, no audits, no revealing of the details of its business to potential competitors. Felix Salmon explains how it might work.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.