Will Facebook's Profits Blow Away Amazon's This Year?

Will Facebook pull in more profits than Amazon this year?

It could happen, says the former co-editor of TechCrunch, and its co-founder,Michael Arrington.

Arrington reported on his new blog, Uncrunched, that Facebook posted $1.6 billion in revenue and around $800 million in operating income for the first six months of the year.

With the social network’s revenue and profit rising at a 50 percent clip every six months, $2 billion in operating income for full-year 2011 is fully within reach.

But does that translate into more profit than Amazon would pull in this year?

The online retailer posted first-half-2011 operating income of $513 million.

And Citibank Analyst Mark Mahaney projects some $298 million in operating income for Amazon in its third quarter.

But the fourth quarter will likely result in much greater income for Amazon, given trends in retail.

There is no comparison between the two companies when it comes to revenue, as Amazon is pulling in about $10 billion per quarter, totaling $34 billion for 2010, Arrington wrote.

Arrington thinks Facebook is undervalued is undervalued, with estimates pegging its market capitalization at some $70 billion (the private markets value the company at around $80 billion) compared with around $107 billion for Amazon (is that undervalued too?).

Some say Facebook is overvalued, which might explain why anyone would question whether the site’s profits could outdo those of a business that’s been around almost a decade longer.

Do you think it’s at all possible for Facebook to bring in bigger profits than Amazon this year, readers?

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