Is Facebook Worth as Much as McDonald's?

• by Erik Sass , Staff Writer @eriksass1, January 30, 2012

There are many remarkable facts surrounding Facebook’s upcoming initial public offering, which the Wall Street Journal reports could get underway (at least with the filing of preliminary paperwork) as early as this week. For example, the fact that a $10 billion stock offering might value the social network at $75 billion -- and that this might even be considered a tad low. But one piece of trivia struck me as especially interesting: valuing Facebook at $100 billion, as seems to be the general consensus, would make it the same size as McDonald’s.

Is the world’s largest social network really worth as much as the world’s largest fast food chain?  Of course, this question is to some degree comparing apples and oranges. But these apples and oranges happen to have some common attributes and quantifiers, including audience size/customer base, revenue, frequency of visits, and so on -- so I intend to compare them, darn it.

First up is customer base. McDonald’s serves some 27 million customers per day here in the U.S., and around 68 million per day globally. Meanwhile roughly half of Facebook’s 800 million members check in on an average day. So in terms of daily user base, Facebook is the clear winner with around 400 million daily visitors.

What about revenue? In 2011, McDonald’s took in $27 billion in revenue, including $6.8 billion in the fourth quarter. Meanwhile Facebook’s total revenues probably reached $4.27 billion in 2011, according to eMarketer. Divided by the number of daily users, that comes to annual revenues of $397 per daily customer for McDonald’s, and $10.68 per daily visitor for Facebook.

In terms of monetizing its customer base, it’s no surprise that McDonald’s is way ahead of Facebook, since it sells food that people actually pay for, versus simply showing them advertising. But then there’s the question of revenue growth trends -- and here Facebook is clearly more dynamic, at least in proportional terms.

Facebook’s total ad revenues have increased from $738 million in 2009 to their present level, equaling 478% growth in two years, and are forecast to reach $5.78 billion in 2012, for 35% growth in 2011-2012. McDonald’s also saw revenues grow, and actually beat Facebook in absolute dollar terms, climbing from $22.74 billion in 2009 to $27 billion in 2011, for an 18.7% increase in two years.

So is Facebook, the burgeoning online social network, worth as much as McDonald’s, the mature fast food empire?  I guess that ultimately depends on whether you think Facebook can match (or exceed) McDonald’s revenues in the long term. What do you think? Will Facebook be raking in $27 billion a year a decade from now?  Who can tell? All I know is I’m craving a Big Mac.