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Bill Gurley Bullish On Facebook, Social Media Firms
CNBC.com | February 03, 2012 | 03:15 PM EST

Facebook might well be worth its $100 billion pre-IPO valuation based on its dominance in the sector, venture capitalist Bill Gurley said Friday.

“From my perspective, the No. 1 thing that investors care about are barriers to entry and competitive position. From that standpoint, it’s hard to find another company in a better position,” he said.

In a wide-ranging interview on “Fast Money,” the Benchmark Capital general partner spoke about social networking and weighed in on a range of online companies, including which ones he was backing.

Gurley said a “protective moat” around Facebook’s business made it difficult for competitors to pose a serious threat in the near future, noting that other players such as MySpace, Friendster and Orkut have faded amid Facebook’s ascendancy.

Gurley said Facebook could see its stock trade at 10 to 12 times next year’s earnings, a thesis he discussed on his blog, Above the Crowd , and said the sector had room to grow.

“I would still argue social networking is in its infancy, that people are just figuring out what other people are going to do on these networks, and I would offer that the company has a ton of optionality from where it sits to establish new revenue models, new product lines, those kinds of things,” he said.

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