A penny (or a load of cash) for your thoughts?

For those number-oriented folks out there who have a vested interest in social networks, Michael Arrington with TechCrunch delivers your Christmas gift early. In a thoughtful and thought-provoking piece, he provides a perspective which, I think, threatens to overturn our current (e)valuation of social networks – on both a fiscal and a social level. In Modeling the Real Market Value of Social Networks, Arrington suggests that the true worth of a social networking site should be measured not by how many unique users have registered with it, nor how many page hits it has per day/month/year, but rather by how much advertising is spent on each individual user. Arrington and company have built “a model taht looks at social network usage by country/region and compares that to available data on total Internet advertising spent in each of those countries. The model is then able to turn an apples-to-oranges comparison into an apples-to-apples comparison.” As he goes on to state, “the early results are surprising.

Although I’m deep down uncomfortable with assigning different human beings with varying levels of value, I have to admit in the current state of affairs, such a formula only makes sense. Were the world totally flat, as Thomas Friedman imagines in The World is Flat, then each user might be valued totally equal to every other user. After all, their opportunity to “plug in” will be the same as everyone else. Now, though, the Internet pie is uneven and inequitable. As many respondents have pointed out, Arrington’s model has some flaws. Nevertheless, I find the perspective refreshing and am excited to see what comes out of later models.

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