Social Media Valuations Skyrocket

By Gary Kim January 24, 2011

Google's market value has been something of an irritant to executives at service provider firms that have been in business much longer. Verizon Communications has a market capitalization of about $90.8 billion. AT&T has a market cap of about $167.4 billion. Google has a market cap of about $195.7 billion. 

But those executives might soon find out that social media firms are the next big group of companies that quickly rocket to valuations of Google-sized proportions. Facebook might have a market capitalization of about $50 billion, for example.

Groupon was valued at about $1.5 billion in April 2010, but now seems to be valued at as much as $15 billion. Google valued Groupon at $6 billion late in 2010. The company sells digital coupons, is only two-years-old, and has dozens of competitors. 

Of course, lots of firms in the Internet and application ecosystem will never be worth such amounts. But the outsized valuations of at least the top firms in social media indicate where financial markets perceive growth and value in the Internet ecosystem these days. 

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Gary Kim is a contributing editor for TechZone360. To read more of Gary’s articles, please visit his columnist page.

Edited by Tammy Wolf

Contributing Editor

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