Somebody please help me understand

[ksmith]

...why Facebook is considered to be worth $42 billion?

Facebook's latest valuation, according to trading on SharesPost Inc., an online marketplace that trades in shares of private companies, is greater than that for Internet giants EBay Inc. or Yahoo Inc.

"Over the years people have paid premiums for the companies best positioned for long-term growth and margin expansion. For good reason, Facebook is perceived of as one of those companies," Standard & Poor's analyst Scott Kessler said. "Whether or not at this point in its life cycle it deserves to demand a valuation that essentially makes it the second- or third-most valuable Internet company on the planet is an open question."

I understand that companies use Facebook as an advertising site, a way to hook up with potential and current customers. Writers, musicians, etc use it as a way to connect with fans and promote themselves. A lot of people use Facebook. Is that what makes it worth $42 billion? Has anyone tried to estimate total business earnings as a result of presence on Facebook, assuming that's even possible?

So far, I have friended/fanned pages of some companies I already have done business with. Sometimes I click through newspaper or magazine links that interest me. Is that where the worth comes in?

Comments

[kristine-smith.livejournal.com]

(which isn't twitter, but that's a different discussion).

Do you have any thoughts on what that might be?

I'm seeing a technology that doesn't let you avoid the advertising, and that becomes so intertwined with everyday life that every move you make is monitored and you are constantly pushed to buy or persuade others to buy. Whether you're monitored by implant or by a blanket of external devices? Guess it depends what people are willing/compelled to put up with.

It's a very Gibson/early Stephenson type of world.

[technomage.livejournal.com]

Sorry for the delay in response... the year's end was busy.

What I see is a more accessible version of 2nd Life. Something that mashes up tweets, Facebook, and an avatar-bases pseudo-realism. There have been numerous attempts, all have failed to some degree. The interesting thing is once you suck a person into 2nd Life (that is they've suspended disbelief enough to get hooked) then they actually start to do things like jobs, buy virtual real estate with CASH, develop complex scripts and programs they vend for CASH to others... its a touch surreal. And advertising for in-world events and such is everywhere.

The point is that people have to obtain value from the experience. Some of that can be simple recreation, but that only goes so far. If we can blend more of WoW, FB, OK Cupid and such together so people are engaged in the real world and the virtual world, then we'll have something that is both useful and marketable.

Yes, early Stephenson for certain. Snow Crash sans Crash.

[kristine-smith.livejournal.com]

My main concern would be if/when folks started giving the virtual life priority, which they might do more readily if there's a financial crossover with real life.

I just have this vision of rows of Jabba-people floating in tanks, hooked up to function support--food, waste--living in a dream world, with the difference being that they are also supporting an economy, possibly a family. Opportunities for weirdness abound.

[technomage.livejournal.com]

Weirdness only on certain levels. I'm sure you've seen the stories of the kids who work in Korea and Kansas as World of Warcraft drones. They do boring tasks to accumulated goods in the game, which they then sell for cash. Some of it is even done by "legitimate" businesses. The question is how to monetize WoW.

I could see such a world as you describe, but the support system would be incredibly expensive. You'd have to be very specially skilled to be able to afford such support. Also... kids? Only by artificial insemination. This would return marriage to being more of a financial contract such as nobility used in the feudal period.

[kristine-smith.livejournal.com]

Yeah. Writer brain looks for the dramatic, but in the end, the transition to that sort of world will likely go in stages and seem very humdrum...which is why it will stick.