• by Erik Sass , Staff Writer @eriksass1, March 4, 2011

Bubble or no, the value of leading social media companies just seems to keep going up -- even when analysts can't point to anything which happened to justify the increases. This week brings the news (first reported by CNBC) that Facebook has been valued at $65 billion by General Atlantic, an investment firm which is trying to acquire a 0.1% stake in the company by buying up 2.5 million shares from former Facebook employees.

Although it was a long time ago -- almost two months now -- some readers with long memories may recall a deal which valued Facebook at $50 billion back in January, when Facebook raised $1.5 billion from Goldman Sachs Group and Digital Sky Technologies. Casting your memories even further back in the mists of time to last September, Peter Thiel, and angel investor and Facebook board member, suggested that Facebook was worth $30 billion. And that was up from the $24 billion valuation suggested by private trading in July.

I'm sure all this makes eminent sense, somehow, but I will admit I'm at a loss to explain how a company can almost treble in value in six months without, well, like, doing anything. Especially considering that Facebook's revenues in 2010 came to $1.86 billion -- meaning the most recent valuation is just about 35 times the latest revenue figure (and with no indication, by the way, how much of this was actually earnings).

Okay, there have been a couple significant developments. Facebook Places (the company's mobile check-in service, competing with the likes of Foursquare and Yelp) launched in August -- and the social network has added about 150 million members around the world, growing from roughly 500 million to 650 million, for a 30% increase. But the meteoric rise in Facebook's value doesn't seem to be connected with the increasing user base: how does a 30% increase in the number of users translate into a nearly 200% increase in valuation?

As noted, Facebook Places might also seem to be a promising area for future revenue growth -- but so far there's precious little information about how many people are using Facebook Places on a regular basis. Without this kind of information, it's an insubstantial rationale for the company's exploding valuation.