Facebook: The IPO That Wasn't Nor Will Be

Facebook is trumpeting huge user-growth numbers, but as questions over its proper valuation swirl, some industry observers argue that the social-networking Web site's best shot at being an Internet IPO has passed.

Two camps are at war over Facebook's proper valuation, and each side presents a compelling argument. On one hand, an investment from Microsoft (MSFT Quote) in October 2007 pegged the company's total value near $15 billion. On the other hand, tech companies with stronger revenue streams and better advertising models, such as Google (GOOG Quote), have seen their share value slashed in half since that valuation was made.

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So who's to be believed? Looking at Facebook's user data, it's hard to not be impressed. Founder Mark Zuckerberg said Wednesday that the site now has 150 million monthly active users, with almost half of them are using Facebook every day. That's up from 100 million active users, a milestone that Facebook reached in August.

"If Facebook were a country, it would be the eighth most populated in the world, just ahead of Japan, Russia and Nigeria," Zuckerberg wrote in a note Wednesday.

For now, a slowdown in user growth doesn't appear to be imminent, if a recent move by Apple (AAPL Quote) is any indication. During his keynote speech at MacWorld on Tuesday, Apple marketing chief Phil Schiller unveiled an update to the iPhoto software, which will use face-recognition technology to group digital photos together.

The iPhoto software will be linked to Facebook and will allow tagged photos to be synched between the two automatically. Apple's decision to integrate the iPhoto software with Facebook could mean an increase in users and traffic to the social-networking site.

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