Is the Facebook IPO Worth the Risk? (Update 1)

NEW YORK (TheStreet) -- As Facebook gets set to go public later this month, some are beginning to question whether the social networking giant is worth the investment.

Facebook last week filed an amended S-1, with first-quarter revenue rising 45% year over year to $1.06 billion (ad revenue rose to $872 million). Revenue fell 6% sequentially from the fourth quarter of 2011 when it generated $1.13 billion in sales.

Revenue growth is a major issue for investors, according to Boston University professor N. Venkat Venkatraman, chairman of the Information Systems Department of BU's School of Management.

"Other investors will focus on Facebook's monetization machine and question if Facebook could create and maintain the growth in revenue and profits," Venkatraman said in an email.

At around $3 billion in trailing revenue, that would value Facebook at about 33 times revenue. By comparison, Google(GOOG) trades at 6.04 times revenue. Revenue growth is much slower at Google, with first-quarter growth coming in at 22% year over year, compared with Facebook's 45%.

Even though there are worries over Facebook's traditional advertising model, the company offers something no other traditional online advertiser like Google or Yahoo!(YHOO) possesses: the "like" button.

A simple concept, users click the "like" button whenever they see a post, a brand or a comment they like. "If Facebook can turn the 'like' button into effective advertising, the possibilities are endless," said one hedge fund analyst who declined to be named. "It could make them a trillion dollar company."