Pricing Facebook: Writing's Not on the Wall

The worker bees at these companies have visions of big payoffs like those given to employees at Microsoft or Google(GOOG Quote) when those two tech giants went public. But big paydays have been delayed as the M&A and IPO markets dried up in the credit crunch, damping investor appetite for these companies.

eBay(EBAY Quote) paid $1.8 billion for Skype in 2005. However, the experience of rival voice over Internet protocol company Vonage(VG Quote) since it went public suggests eBay overpaid.

"Vonage has the same concept, voice over internet, and it got hammered when it went public," says Cyrus Lam of KPMG Corporate Finance. Vonage started out as a $15 stock is currently trading at $1.35.

Lam doesn't see Facebook getting the high end of its range of estimates. He thinks it's a wonderful site, but questions how it can make money.

"Simple banner advertising or text won't make much money," he says. "You go to Google to search and to Facebook for friends. What they are trying to do is fit the friends into the advertising model, when instead they should evolve their own business model." He suggests developing a gaming model, where people pay to play.

Until then, investors are left to their best guesses. Silbert maintains his marketplace for the private stock, which lets the buyers and sellers determine the price, is the best way to place a value on a private company in the absence of an IPO market.

"Venture capitalists are embracing the secondary market," he says.