Facebook and the internet
http://dealbook.nytimes.com/2011/01/02/goldman-invests-in-facebook-at-50-billion-valuation/
Insane valuation. The largest IPO offering was around $22 B. I think there is a very interesting trend that is following, and Facebook is leading the pack. Many people underestimate the importance of Information Technology (i.e. the exchange of information through the medium of the internet). However, I think the internet is the medium of media. In other words, you can have any form of information sharing through the internet - text, video, sound, banners (the new billboard).
There are many sites out there that many wouldn't consider a particular venture - Grooveshark, Groupon, Zynga, LinkedIn - to name a few. What's more is that they are not necessarily tangible forms of enterprise like say a commodity, or even a stock in general. However, it can be considered that their best form of valuation is rooted in advertising, or by the number of users exposed to such advertising. I think it would also be easier to judge market share if we consider the internet overall as a container and we were to monitor and evaluate internet traffic, easily achievable. After all, most sites love to boast their numbers, but there are much more accurate forms of measuring this sort of traffic.
My issue is in the evaluation of brand power. How does the brand of an internet company stack up against a company that is more physical, say, Caterpillar. Is brand really relevant or is it more about function and practicality? To some extent, yes; in other cases, not so much. In other words, if Facebook were instead named something along the lines of "Zuckerberg," or even Myspace, would we really care so long as it functioned exactly as Facebook does today? The mix of such subjective valuations of brand, power and the intangibility of internet companies is particularly interesting for this reason. Most people would call it tech, but I think internet companies are a standalone market of the media source. Granted, we can talk about the relevance of other forms of media (such as television, print, etc.), but that's a different conversation for another day.
Cheers
Insane valuation. The largest IPO offering was around $22 B. I think there is a very interesting trend that is following, and Facebook is leading the pack. Many people underestimate the importance of Information Technology (i.e. the exchange of information through the medium of the internet). However, I think the internet is the medium of media. In other words, you can have any form of information sharing through the internet - text, video, sound, banners (the new billboard).
There are many sites out there that many wouldn't consider a particular venture - Grooveshark, Groupon, Zynga, LinkedIn - to name a few. What's more is that they are not necessarily tangible forms of enterprise like say a commodity, or even a stock in general. However, it can be considered that their best form of valuation is rooted in advertising, or by the number of users exposed to such advertising. I think it would also be easier to judge market share if we consider the internet overall as a container and we were to monitor and evaluate internet traffic, easily achievable. After all, most sites love to boast their numbers, but there are much more accurate forms of measuring this sort of traffic.
My issue is in the evaluation of brand power. How does the brand of an internet company stack up against a company that is more physical, say, Caterpillar. Is brand really relevant or is it more about function and practicality? To some extent, yes; in other cases, not so much. In other words, if Facebook were instead named something along the lines of "Zuckerberg," or even Myspace, would we really care so long as it functioned exactly as Facebook does today? The mix of such subjective valuations of brand, power and the intangibility of internet companies is particularly interesting for this reason. Most people would call it tech, but I think internet companies are a standalone market of the media source. Granted, we can talk about the relevance of other forms of media (such as television, print, etc.), but that's a different conversation for another day.
Cheers