When Facebook paid $19 billion for messaging service WhatsApp last month, the reaction in many quarters was astonishment. How had Facebook arrived at such a mind-boggling valuation for a five-year-old firm with 50 staff?

Analysts' explanations, that WhatsApp's user base is growing fast and Facebook was keen to snap up the firm before a competitor acquired it, did not seem to account for the full price tag. But if $19 billion was far too high, what would the right price be? How do you value a young technology firm?