<html> <head><style type ="text/css">body { font-family: "Bloomberg Prop Unicode I", Verdana, sans-serif; font-size:125%; letter-spacing: -0.3pt; color: #FF9F0F; background-color: #000000; text-align: left; } p {line-height: 1.25em; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" );} h1, h2, h3 { text-align: left; font-weight: normal; color: #FFFFFF; } h1 { font-size: 130%; } h2 { font-size: 115%; } h3 { font-size: 100%; } #bb-style { font-size: 90%; max-width:900px; width:expression(document.body.clientWidth > 900? "900px": "auto" ); } b, strong { font-weight: bold; } i, em { color: #FEC54A; } pre { font-family: "Andale Mono", "Monaco", "Lucida Console"; letter-spacing: -0.3pt; line-height: 1.25em; } table { border: 0; font-size: 90%; width: 100%; margin-left: auto; margin-right: auto; } td, tr { text-align: left; } td.numeric { text-align: right; } a:link { color:#53B2F5; text-decoration: none; } a:visited {color:#53B2F5} a:active {color:#53B2F5} a:hover {color:#53B2F5} </style> </head> <body> <p>By George Anders</p> <p>As Facebook Inc. prepares to go public next year, the prospect of  investors valuing the company at $100 billion has implications stretching far beyond the creation of another tech-stock giant.</p> <p>Facebook is the ultimate Tom Sawyer company, made strong by the labors of its 800 million users, in the same way that Mark Twain's fictional 19th century character relied on his friends to paint a fence. Facebook's employees create very little of the social network's addictive content. Instead, the company connects online visitors who share all the gossip, friendship, travelogues, photos, recipes and philosophical musings that have sustained human interaction forever.</p> <p>Who benefits? Users clearly welcome the chance to hang out with friends, without paying a penny. In September, according to Nielsen, Facebook attracted 155 million unique U.S. visitors, who spent an average of 7 hours 42 minutes on the site that month. Only Google Inc. attracted more visitors, and no other top 10 site commanded even half as much of people's time.</p> <p>The big gainer is Facebook itself. By offering such a huge captive audience to advertisers, Facebook is on track this year to reap $4.27 billion in revenue, according to research firm EMarketer Inc. That's more than double the year-earlier total. Facebook doesn't yet disclose its financials, but analysts believe it is highly profitable.</p> <p>Advertisers savor Facebook's ability to segment its audience with uncanny precision. If you're selling high-end Himalayan travel, for example, you can target 120 U.S. adults on Facebook who work at Goldman Sachs Group Inc. and like hiking or mountaineering. The possibilities are endless.</p> <p>Big challenges lie ahead in what boundaries Facebook sets regarding its users' data. Today, Facebook agreed with the Federal Trade Commission to settle complaints regarding users' privacy issues. As Facebook keeps expanding, new controversies will be unavoidable.</p> <p>Meanwhile, Facebook's potential market capitalization will amount to valuing each current user at $125 apiece. Who knew that status updates, birthday-bash photos and friends' reading lists could create such a jackpot?</p> <p>(George Anders is a member of the Bloomberg View board of editors.)</p> </body> </html>