However, I see something like this and I wonder: "wow, Facebook is valued at over 10 times this purchase price (which is already inflated by virtue of it being a purchasing price)." I don't know what to draw from that; intuitively I see less value in Facebook, but I certainly haven't done an in-depth analysis.

That's the reasoning, whether you agree with it or not.

In contrast, National Semiconductor earned about $220 million in profits for approximately the same period: http://www.google.com/finance?client=ob&q=NYSE:NSM (not exactly the same months, because their Q1 goes from Dec-Feb, but still a useful point of comparison)

One can make the case that Facebook is overvalued, perhaps even grossly overvalued, but to say that it should be valued at less than National Semiconductor is a big stretch, even if you are very conservative and use only current bottom-line financials. In my experience, those who make such statements are not basing their opinion on fundamentals of the companies, but on an opinion that companies like National Semiconductor do "real" engineering as opposed to "frivolous" social networking sites like Facebook. It's discouraging to see such attitudes, but they are not new: both early internet companies (including ones that survived the bubble and turned out to be sound companies) as well as early PC-era companies were also derided as toys or fads.

So yes, a somewhat larger valuation for Facebook than National sounds reasonable. So, $6B -> $15B, $20B.

http://www.google.com/finance?q=National+Semiconductor&o...

But it sure as hell will be tomorrow look at that after hours!

The statement, "TI, which makes low-power chips, said..." is a huge understatement. TI dabbles in every area of electronics. Their 30,000 analog parts are supplemented by >70,000 other parts, and that number only accounts for parts which are available from Digikey.

Diversity may also be misperceived, as the companies may not compete directly on all product lines. If you need a chip for something, there are times when it is only produced by one company.

Here are a few quickly-Googled numbers:

  TI
  Revenue: $13.966 billion
  Net Income: $3.228 billion

  ST Microelectronics
  Revenue: $8.465 billion
  Net Income: $1.131 billion

  NXP Semiconductors
  Revenue: $5.44 billion
  Net Income: $1.823 billion

  Infineon (Siemens)
  Revenue:$4.688 billion
  Net Income: $937 million

  Freescale
  Revenue: $4.46 billion
  Net Income: $1.15 billion

  Analog Devices
  Revenue: $2.8 billion
  Net Income: $712 million

  ON Semiconductor
  Revenue: $2.131 billion
  Net income: $395.8 million

  Maxim
  Revenue: $1.998 billion
  Net Income: $129 million

  Fairchild Semiconductor
  Revenue: $1.6 billion
  Net Income: $193 million

  National Semiconductor
  Revenue: $1.42 billion
  Net Income: $209.2 million

  Linear Technology Corp.
  Revenue: $1.17 billion
  Net income: $361 million

Regardless, TI is bigger than any of those companies, and probably bigger than all of those companies combined.

This does have an impact, though, on the support components which are necessary to build a motherboard - voltage regulators, sensors, diodes, transistors, glue logic, level translators, etc. National and TI used to be competitors in that arena, now they're on the same team.

It is pretty crazy that Facebook is valued over 10 times this but if we didn't have facebook we wouldn't have likes, pokes or farmville...... If we didn't have Semiconductors we might not have Facebook. Strange world indeed! "Like" it though.

And if we didn't have sand we wouldn't have semiconductors, but I still ain't buying up the Gobi Desert.

NI/TI produce REAL, IMPORTANT devices and platforms which a large quantity of the world runs on that keeps you dry, transported, fed, sheltered and entertained.