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I always find it very hard to grasp the value of software companies intuitively. If Facebook is worth $100b right now, it is already bigger than Amazon or Siemens! Of course a huge part of the value is an x% chance bet on future growth / future ability to monetize and doesn't reflect the current status you can see - rationally I can believe the valuation is defensible but emotionally I always think "No way!"

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Well, compare

http://investor.google.com/financial/tables.html

with

http://www.siemens.com/annual/11/_pdf/siemens_ar2011_cfs.pdf

and you'll see that Siemens had an EBITDA of eur 9,242 million, while Google had an EBITDA of 2.79 billion

Facebook has a projected EBITDA of 2 billion or so, based on 250 million in 4th quarter earnings.

So, if you applied traditional valuation methods, Siemens should be worth more than Google or Facebook. However, Siemens is more stable, while both Facebook and Google haven't tapped into more potential sources of income, and that's what investors are recognizing by valuing it that way.

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