Tagged: wow gold
November 13, 2017 at 3:11 am #16765
Probably the most cheap fast wow gold reliable way to value a new company is the technique called mark to like. When a company is too new for its current size, its current revenues, or its current profits to serve as an accurate indicator of its value, we look for the most similar company we can find and start the valuation there. That provides the like. We take the value of the like, and then adjust it up or down to assess the new company that we are trying to value.
Sometimes the answers will make us place a larger value on the new company than on the like (since the market for search at Google is larger than the market for airline reservations through Travelport, all other things considered, the value of Google should be larger than the value of Travelport). Still, after 15 years, ecommerce is used mostly for the selling of traditional goods and services. Online commerce is not about selling frisky electrons (or frisky photons, actually); it is still about selling the goods and services they describe. Perhaps the truly e est of today’s online apps is World of Warcraft, where people who have never met, meet and cooperate on complex quests to achieve tasks, that, well, don’t exist.
Facebook may not be as purely e as we once imagined online commerce would be, but it certainly is cool. About 800 million people use Facebook to communicate, to keep in touch, and to share photos, stories, and updates on their activities. They use it to communicate their likes and dislikes about ideas and companies and products. And increasingly they use Facebook instead of phone, email, texting, and other forms of messages to coordinate their activities in real time. Facebook may have started as a way to find a classmate or learn what a classmate did, but it is turning into a mechanism for coordinating activities and deciding what to do. This encompasses anything from coordinating a group’s activities or finding a date to planning and executing a revolution and overthrowing a government.
But how much of this is new? Social networking itself is not new. As humans we have been networking since, well, before we were human. Our closest living primate contemporaries have social networks, and our proto human and pre human ancestors must have had social networks as well.
Online social networks are new. And the Facebookification of the planet may be new. It has already led to changes in dating and changes in social interaction. herding replacing dating, where young people congregate more as groups than as couples. So that suggests we start with an entertainment company, a communications company, and a “moving stuff rapidly” company to provide our first attempts at the likes. As an entertainment company, let’s start with Disney, with a market capitalization of about $72 billion. Let’s use Verizon as our communications company, with a market cap of about $107 billion. That’s probably too high. In part, Facebook shares these markets, since time we spend on Facebook is probably time we are not going to see Toy Story 4 or 5, or watching ESPN, and probably not time we are texting our friends or talking to our parents with our cellphone. Facebook is a blend of these three companies, and partly it is a competitor. Viewing Facebook as a blend, we might just start by averaging the value of the three companies we selected as likes. That would give a value of $67 billion.
However, Facebook is not done growing and it is not done growing these three markets. The value of $67 billion would therefore be too low. Only a small fraction of its profits come from ads. Facebook is different from all three, with a different business model and a different revenue stream. I can’t see us giving our kids a Mark or Randi Zuckerberg doll as a birthday or holiday present. Likewise, Verizon makes most of its money selling us bandwidth, not serving us ads. And of course Fed Ex makes its money moving stuff around, such as packages and urgent documents that for some archaic reason need to be seen and signed in their original form. Again, their revenues and profits do not come from ads. will users accept this business model?
Even if an entire generation believes, now, that privacy is dead, it may not be dead forever. Indeed, as this generation ages, as the implications of having a permanent online audit trail become more clear, privacy may reemerge as a central concern. Personal information, naively shared, remains online indefinitely, and as the history of how this information can be used years or decades later becomes more clear, privacy may indeed be a significant concern. If Facebook’s value proposition and revenue streams mostly come from tracking their users most intimate relationships, recording this information, and monetizing this information, how will this affect the company’s success? How will it affect their ability to compete in entertainment, communications, and rapidly moving stuff? How will concerns about privacy affect the valuation of a company whose revenue stream and business model rely upon monetizing personal information?
What if Disney tracked, forever, every movie I saw and every product I bought, and everyone I saw the movies with? Actually, this is probably OK. It’s hard to get safer than taking your own kid to see The Little Mermaid. There are unlikely to be any X rated skeletons to worry about later. What if they recorded everything you bought as a
So there really is a big difference between Disney, Verizon, and FedEx on the one hand and Facebook on the other. These companies make their money serving us. Facebook serves us, but it makes its money elsewhere. It makes its money tracking us, and then using the results of the tracking to allow others not so much to serve us as to serve us ads.
Is this morally acceptable? Why not? If the kids who use Facebook (i) know what it’s doing (they seem to) and (ii) it’s OK with them (it seems to be at present) and (iii) if they know what can happen if they post things now that will haunt them forever, like a poorly thought out tattoo for a long gone lover (they don’t seem to know or care), then why not? A business model based on selling the privacy of people who don’t yet know or care what this will mean in future may not be what I expected from a crusading hacker who claims to be more concerned with changing the world and serving his users than with revenues. Facebook reported $4 billion in revenue from 800 million users. $4 billion certainly sounds like a large enough revenue value for a start up, when compared to the numbers reported by IPOs during the run up to the dot com collapse. But with 800 million users, Facebook is not exactly a start up. They have had time to show us how well they monetize their users. So it’s reasonable to ask how their revenue numbers compare to the companies we selected as comparables.
Verizon reported revenues of $106 billion, almost exactly the same as its market cap. By that measure Facebook’s valuation should be $4 billion. Now we need to expect Face book to grow its user base or its revenues per user by a factor of 25. Increasing the user base by a factor of 25 would require Facebook to have more than 20 billion users, or more than the total population of the planet, which is clearly impossible. Alternatively, to be valued at $ 1000 billion as a Telco they would have to increase their revenues per user by an enormous multiple, which clearly they have been unable to do to date.
But Facebook wants to be valued as an ad company, so let’s compare them to an ad company. The New York Times reported total revenues last year of almost $3 billon. Its digital subscriber base is under 400,000 including online subscriptions to the International Herald Tribune. Add traditional, printed edition subscribers to the Times and The Boston Globe, ignore double counting, and you still end up with a subscriber base safely under 1 million. So the Times’ revenue per subscriber works out to be 500 or even 600 times greater than Facebook’s revenue per user. Yes, the Times has been around longer, but it is supposed to be in a dying industry. But Facebook has been around long enough to figure out how to monetize the US, and it has not done so as an ad company. Additionally, its prospects for ad revenue in emerging African and Asian markets may be limited.
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