Facebook now worth more than $150bn

MARK Zuckerberg's social network joins elite club of companies that were worth more than $150bn before celebrating their 10th birthday.Facebook’s market capitalisation has passed the $150bn mark, putting the social network in a very exclusive club of companies to break through the watershed valuation before they turned 10 years old.

Shares in the social network rocketed more than 15pc on Thursday, following a strong set of results on Wednesday that demonstrated the company has finally worked out how to make money from mobile users.

Facebook’s revenues jumped 55pc to $7.87bn in 2013, accelerating sharply in the fourth quarter, when the social network received more than $1bn for adverts on its mobile site. Profits grew more than seven-fold to $523m in the quarter, bringing the annual total to $1.5bn.

The performance has vindicated investors who kept their faith in the company following its disastrous initial public offering in May 2012. Facebook floated at $38 a share, but spent most of the year that followed well below that valuation as it struggled to adapt its business model to the rapid shift in user habits away from PCs and towards mobiles.

Critics argued that Facebook was a passing fad, and that it would be displaced by another social network with a business model better suited to use on smartphones.

However, as Facebook prepares to celebrate its 10th birthday next week, investors are betting that the company founded by Mark Zuckerberg in his Harvard dormitory still has considerable growth to come. The shares climbed 8.44, or 15.8pc, to $61.97 in lunchtime trading on Thursday, handing the company a market capitalisation of more than $152bn.

One of the few companies to have surpassed this value is Google. The Californian web search giant was worth $218.5bn in October 2007, less than a decade after its inception. The company is now worth more than $380bn.

Ken Sena, a technology analyst at research firm Evercore, noted that Facebook’s revenue growth had accelarated for three consecutive quarters, as he raised his target price on the company to $70.

Facebook’s user base has started to level off, reigniting concerns that it has hit saturation point in the US, and that it is starting to lose its appeal to teens. However, the company dramatically increased the amount of money it is able to make from each of its members. In the fourth quarter, it made 25pc more from every Facebook member than it did in the same period the previous year, and 71pc more per user visit.