Posted by: Marshall Sponder | June 24, 2008

Thoughts on TechCrunch’s Modeling The Real Market Value Of Social Networks

I was at Jeff Pulver‘s Social Media Breakfast this morning and happened to notice @jowyang tweet on a TechCrunch post by Micheal Arrington titled Modeling The Real Market Value Of Social Networks.

I actually read most of the comments to that post on my handheld (150 comments at the time) and have to say that I wished I had been the one to write that post of value of Social Networks – I know I could have done it becuase I have same data to work with that Michael Arrington does – ComScore.

I found the 155 comments to the post as interesting, in many cases, more illuminating than the post, itself, and I imagine one could go a lot further with the analysis.

Areas I’d delve into

  1. Demographics of each Social Network in each country, combined with the share of audience, and come up with quality points that way.
  2. Time Spent on site, return visits per visitor (per month) might be a valuable metric that could show how engaged members are.

Depending on how you want to “cut” the data, your going to entirely different results

And I’m just looking at the longest visits to Social Networks, and I come up with names that aren’t even on Arrington’s list.

Michael Arrington did a good piece of work, I wish I had done it – but had I done it – I would have created something else because I don’t think – personally, that looking at Social Network based on how much they’re worth from the advertising they can show – is the way to look at Social Networks – but that’s just me.

I think, personally, that Social Network Valuation needs to be approached based on what it enables – and the value that.   In other words, the value of the things that happen because there is a social network connecting people that would not have happened, otherwise.

And, let’s not forget, that Michael Arrington answered his own question with the data – but the limitation might be, not in the answer, but in the question.

Worldwide, Facebook is beating out MySpace, on visitors, and that just happened in the last 6 months or so – and if you want to be correct about it – what happened last November?  Was it the Beacon roll out?  Maybe, that’s where it started to pick up for Facebook – even though that rollout got rolled back.

To be honest with you, had I the time, I could have done a better analysis than what Arrington came with up with – and come up with entirely different conclusions.

If we want to figure out valuation of Social Networks – that’s a question we sit down and decide what would be an indicator of value – and honestly – I don’t think it’s the advertising – at least, not yet.

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