facebooklog.jpgYahoo may regret not paying up for Facebook last year, a report by analysts at Needham argues.

The report, co-written by analyst Mark May, who covers consumer Internet, references Facebook’s most recent traffic numbers (about 1.5 billion pages/day, first reported here at VentureBeat) and says social networking could one of the most important growth areas of the Internet over the next five years.

By referencing Facebook’s doubling in growth, the reports also implies Facebook may be worth twice what it was last year, suggesting the business may have a $3 billion value to a buyer based on last year’s supposed $1.6B Yahoo “offer.” Download the report here.

Of course, this assumes that Facebook’s Mark Zuckerberg was prepared to sell in the first place.

But why does Needham keep Yahoo at a “buy” recommendation, when the 12-month target price of $30 is lower than the current price of $31.72?