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Who else is at the table?

Of the companies which are pure internet plays (ie not simply using it to do something like sell books or have tchotchke auctions in a new manner) only Google seems to have broken through into those sunlit uplands, and that's on the basis of controlling the advertising for everyone else rather than the specific service it offers as a search engine.

We could even get all Hegelian here, thesis and antithesis: the very success of any online adventure sparks up enough dissatisfaction with the way it's being done that it creates its own competition. Maybe Diaspora will actually work - or something like it. The aim being that the individual decides what to share and with whom, not some central company like Facebook. (Perhaps server/client is a better description, the client deciding what to release to which of many servers, rather than the centralised Facebook model.)

The answer to what Facebook is actually worth, then, doesn't seem to have any hard and fast answers. There is no “true” value of anything: St Thomas Aquinas and Karl Marx were both wrong. The only value of any relevance is the sometimes arbitrary, always subjective value that we human beings put on things. Which is very nice but not really all that useful when we're trying to decide among different methods of calculating that subjective value.

The best answer we can really come up with is that Facebook is worth what people with more knowledge than we have are currently willing to pay for a piece of it - that mid $70s billions valuation. Even then it's best understood as an options price: there's a big downside in that it may be worth nothing as someone comes up with some new and different social media, as Facebook similarly shat on its predecessors.

And there's a big upside, that it becomes a part of the standard media package of the individual: the mobile phone, the email box and the Facebook account. Then it would be worth hundreds of billions as it simply becomes part of the standard infrastructure of life.

I wouldn't buy stock if I could and I wouldn't short it if that were possible. For there's one more thing about stock valuations to keep in mind: they're like poker. There's a mark at every table and if you don't know who the mark is, it's you.

Realising this is the best way to avoid losing at poker by leaving the table: with Facebook, everyone else in the market gets to read the accounts and we don't. Here, we're all marks. ®

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Stay well clear

Zuckerberg and the 499 other select few will make a ton of money out of this. The rest of us should stay well clear. People who are still sore about missing the boat on Microsoft, Google, etc. will chuck money at it and regret doing so until Facebook is as relevant as Friends Reunited.

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Depends

Right now it's worth a bundle, Monetizing the users will start it down the slippery slope to irrelevance, but with 500 million users it's a goldmine of a slippery slope.

Wait too long and something cooler will come along and make the decision for them.

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Remember: you are the product...

...not Facebook.

This from a similarly themed article I read earlier this week:

"Most on the net have yet to grasp that when they are on free sites – Facebook and Twitter as well as Google – they are not citizens enjoying a public service or customers whose wishes must always come first. They are the product whose presence the site owners sell to the real customers in advertising."

For the rest:

http://www.guardian.co.uk/commentisfree/2010/oct/31/google-street-view-intrusion

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