Facebook Frolics, Buy High, Sell Low Dept. 0
The idea behind an IPO is that an enterprise is worth investment in the expectation of monetary return. In the case of online services, the commercial value is based on whether someone is willing to pay for the service (Netflix, Hulu) or whether the service can bamboozle persons in to buying stuff they don’t need for prices they can’t afford (Facebook, Huffington Post).
By either yardstick the verdict on Facebook would seem to be, “errr, no, not really, uh-uh.”
Considering this, Donna Flagg, blogging at Psychology Today, wonders how to value Facebook.
(snip)
Still, many experts believe the real value lies in the money that can be made off the swelling number of eyeballs rapt by the stream of information and trivia updating newsfeeds by the nanosecond. Maybe, in theory, this is true. But not if those eyeballs are more interested in themselves and what their friends are doing than they are in the pesky, persistent ads that aren’t distinguishable enough to stand out and ultimately blend into the rest of the background.
