Over the past century, the average price-to-earnings ratio for big U.S. companies has been 15, according to Anant Sundaram with the Tuck School of Business at Dartmouth. The ratio for Apple is about 15. The ratio for Google is a bit higher. One way to think about that: At current levels, it would the the average company 15 years to generate enough profit to pay for itself. The picture for Facebook is very different. Facebook's price-to-earnings ratio is 100. At current levels, it would take Facebook 100 years to generate enough profits to pay for itself. "Its price-to-earnings earnings ratio is astronomical," Sundaram says. "Off the charts."

Yes, but Facebook is growing. Its price-to-earnings ratio won't stay at 100.

The article mentions Google, but neglects to mention that Google was at 121x price-to-earnings at its IPO.

Well, and Google's stock is way up from its IPO to today.

Although if you bought Apple's stock on the day Google went public, you would have done better than if you bought Google stock that day.

Excellent points.

What do you guys think in terms of how speculative all these p-to-e ratios were given what was known at the time? Was Google a more speculative gamble or is Facebook?

For the longest time Facebook has seemed like this vault that everyone knows has limitless gold inside it -- but nobody knows how to crack the safe. Is there any danger this piggybank is unbreakable?

Google's business model was known at the time of IPO. Google today pretty much makes its money the same way it did in 2004.

By comparison, Facebook still has to evolve, because more of its usage is moving to mobile, which they've never shown they can monetize.

They've always been confident in their ability to execute, but the sad truth is that in 2012 no one knows how to monetize mobile except for games and payment providers.

So Facebook still has to figure it out.

To give an idea of how hard it is to figure out, consider this: Ever since going public, Google has tried to find a way to diversify its revenue stream. So far, in 8 years, they still haven't found a second major revenue source.

Not that it's impossible. Apple evolved from computers to ipods to iphones to ipads. Amazon evolved from selling physical stuff to selling Kindles and digital stuff. It can be done. It's just hard.

What does Facebook have going for it? Stability. The Board serves at the pleasure of the CEO, not vice versa, so he is free to make his decisions without risking getting fired.

Still, he's got a tough road ahead of him. The world is watching, especially would-be competitors and upstarts.