Billion-dollar Web 2.0 decline

Facebook, valued at $15 billion at the time of a $240m investment by Microsoft in October 2007, is now worth only $3.7b according to internal company documents discovered by AP in a recent lawsuit. It‘s possible that Mark Zuckerberg is no longer a billionaire.

Some had expressed doubts about the initial valuation. In any event, it’s only funny money as there is no liquidity until an IPO, and Facebook held out too long to pursue that opportunity any time soon. Given how conservative M&A has become, and difficult it’s proven for Web 2.0 startups to monetize their networks, it’s hard to see how they’ll again sustain a $10b market cap.