Social value

$15 billion for Facebook doesn’t sound so crazy when you consider this: A Deutsche Bank analyst says that a newspaper reader in 2004 was worth $964 a year. Today, that’s $500. Facebook’s 50 million active users translates to $300 per at that valuation. And newspapers are shrinking while Facebook is growing by 200,000 new users a day. A day. And those users spend an average of 20 minutes each day inside the site vs. 41 minutes a month on newspaper sites, says DB.

By the way, the analyst says newspapers will come back into the black in 2012 but I see no rationale in theh E&P story for that prediction.

(Link corrected. Thanks, friends.)

  • http://www.thepomoblog.com Terry Heaton

    This is one of the few things I completely disagree with you about, Jeff. When Facebook uses the private information I give them in a play to target me when I’m away from Facebook, that’s a direction I don’t wish to be a part of. The love affair with Facebook’s hype is about to come crashing down in a sinister form of greed.

  • http://www.buzzmachine.com Jeff Jarvis

    Terry,
    Every single website targets. And in many cases, targeting is helpful – or at least marginally less irrelevant and irritating. How do you think the people you consult for will pay for their work? More efficient — thus targeted — advertising.

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  • http://www.w3.org Matt W

    Hi Jeff,

    Love your blog!

    Just one quick thing, I think the link you have in there is wrong, it points to a story about the LA Times launching a people finder. I think you wanted to link here:
    http://www.editorandpublisher.com/eandp/search/article_display.jsp?vnu_content_id=1003662798

    Keep up the excellent work.

    -Matt

  • http://www.geise.com PXLated

    Sorry Jeff, it still sounds crazy. The newspaper figures are probably based on historical data whereas the Facebook figure is just a hope at this point. Whether they can monetize it and to what effect is yet to be determined.

  • http://craigslistcriticism.blogspot.com Delia

    re:”When Facebook uses the private information I give them in a play to target me when I’m away from Facebook, that’s a direction I don’t wish to be a part of.”

    I think you are right, Terry… and I doubt people knowingly consented to Facebook basically using people’s private information against *themselves* — you’d think at some point they are going to feel they got tricked and just walk away…

    Delia

    P.S. I think a non-profit competitor to Facebook that would safeguard people’s private information instead of abusing it would eventually put Facebook out of business… (just like a non-profit competitor to craigslist that would use the profits that have reached ridiculous levels on customer service and improvements instead of ending up in the shareholders’ pockets would probably make craigslist irrelevant in time) D.

  • http://craigslistcriticism.blogspot.com Delia

    Jeff,

    re:”Every single website targets”

    interesting statement… does craigslist target?

    Delia

  • http://centristcoalition.com/blog Jon Kay

    I think the analyst is wrong. After all, with Facebook’s current business, they’re able to make their users be worth a 1/100th each year of what MS is paying. I posted that I think the deal is mostly to keep Goog out.

  • http://www.thepomoblog.com Terry Heaton

    Jeff, I can’t believe this is coming from you. Targeting based on observed behavior is one thing, but targeting outside Facebook based on private profile information is surely unethical. Follow the dots, man. Where do you draw the line?

    My clients are building their own networks with the intent to create local ad networks, the data from which will be used to target based on observed behavior. If they were to build local social networks and later use that information to target people along the network, I’d feel very ashamed of myself for creating such a monster.

    Again, where do you draw the line? Because what you’re advocating is an utter lack of privacy as regards the Web. Follow the dots. Do you honestly want Madison Avenue or the government watching your every move with an instrument that carries not only your personal identity, but your gender, where you live, your martial and political status, sexual preference, age, where you work, where you went to school, the people you hang out with, the groups you belong to, and so forth?

    I strongly suggest you rethink your position.

    Terry

  • http://relations.ka2.de Gerd Kamp

    Slight typo: The referenced article gives a valuation of $962 not $964

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  • http://www.ad-vocate.com Seni Thomas

    Jeff,

    What is the methodology behind the number? I have to totally disagree with you on this point.

    There is a good post here on the over valuation:

    http://senithomas.wordpress.com/2007/10/25/facebooks-over-valuation-the-20-farce/

  • http://mnthomp.blogspot.com Matt T

    Geez, everyone freaking out over targeted advertising using information that you knowingly gave to a website? I’m not totally up to speed on the whole “targeting outside Facebook” thing, but based on my personal experience (of about four years on Facebook) has not shown any increase in spam or any other unsavory side effects of their marketing strategies.
    And that $300 per user per year is probably not far off, considering that is less than $1 work of marketing value per day. Their in-line news feed advertising even gets by those of us who surf with javascript disabled to get around most online ads.
    Great site, Jeff. Other than your support of Mrs Clinton, of course. ;)

  • http://craigslistcriticism.blogspot.com Delia

    Matt,

    I’m just curious if you read the “fine print” when you joined Facebook and were aware what were the limits (if *any*…) of Facebook using the private info you presumably gave them for the purpose of using Facebook…

    Delia

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  • http://mnthomp.blogspot.com Matt T

    Delia,

    Honestly, no, I did not read any of the “fine print” when I joined Facebook. Just like I did not read the fine print when I signed up with Blogger, Gmail, Flickr, or anyone else who does not take my money. It’s just not that big of a deal to me and a risk I am willing to take. Apparently you are not, and that’s fine. That’s what freedom of choice and competition is about.

    –Matt

  • http://craigslistcriticism.blogspot.com Delia

    Matt: just to make sure I understand you correctly, are you saying you would consent to ANY use of your private info — it would be no big deal for you, *however* they chose to use it… you don’t even care to know… (as long as the site was free)? D.

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