How would you value Facebook in its early days when profits were absent?

• A. EV/Pageviews
• B. P/E
• C. EV/Revenue
• D. EV/Unique Visitors

Answer: (D)

When profits aren’t available, the focus is on how big the audience is and how much that audience could be monetized in the future. For a social network, the number of unique users represents reach, network effects, and the potential ad inventory you can sell as the platform grows. Valuing the company on enterprise value per unique visitor captures how much value investors are assigning to each user and, by extension, to the growth path of monetization.

The other options rely on current earnings or traffic that isn’t as directly tied to future profit. P/E needs profits to be meaningful, and EV/Revenue reflects already earned revenue, which is often minimal in early stages. EV/Pageviews depends on engagement per user and can be volatile or misleading when monetization isn’t established yet. Thus, EV/Unique Visitors best aligns with valuing growth potential from the user base in the early days.