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At 100$ median valuation, wouldn't that mean that facebook's value is inflated (the article states ~250$ per user)?
by kmonad 8y ago
At 100$ median valuation, wouldn't that mean that facebook's value is inflated (the article states ~250$ per user)?
- sonnyblarney 8y agoNo, because the average value is what we'd use in that calculation, not the median. They also left out those who wouldn't leave for any amount of money, ostensibly, which is tricky because they probably valued it tremendously.
- gammateam 8y agoNo it wouldnt mean that The silicon valley user-currency ponzi scheme is just for show, and to be able to afford a home Facebook derives a lot of value from its users but it isnt solely proportional, it is a multinational with many revenue streams
- yellowstuff 8y agoFacebook is valued by the stock market mainly by the profit it's expected to generate in the long run. (Other concerns move the stock price around in the short term, but for most large companies most of the time the stock price will be a good reflection on the consensus view on long term profits.) The value users get from Facebook is almost totally unrelated to profits generated, and therefore to the stock price.
- sonnyblarney 8y ago"The value users get from Facebook is almost totally unrelated to profits generated, and therefore to the stock price." They are definitely related. FB creates some kind of value - some goes to them in terms of profit, some goes to the user in consumer surplus. As FB shows more ads, the consumer surplus goes down. Obviously corps are the one paying, but value to consumers does matter.
- jtolmar 8y agoFacebook's value as a company is related to the total value of its users, not its total value to its users.
- nicky0 8y agoNo because Facebook's valuation is based on its value to its advertisers, not its users.