True worth of social networks{3}


by Irving A
“Modeling the real market value of social networks,” an article written by Jeremy Kessel for techcrunch, discusses the true value of social networks in regards to not the number of users, but the amount of internet advertising they generate. Many believe that a social network, such as Facebook, Bebo, Linkedin and MySpace, are valued on their popularity and the number of page visits they receive. However, using data modeling, other values are generated while changing the worth of a social network in reference to different factors. Many believe MySpace isn’t worth much anymore, while Facebook has increased its worth tremendously recently.  However, surprisingly Facebook is only worth 75% of MySpace’s total worth in internet advertising. MySpace is worth $775 million, while Facebook is only worth $255 million as of 2008. However, it is important to note that MySpace can be worth anywhere from $3 billion to $20 billion, based on point data modeling. The author does discuss the disadvantages of this type of data modeling system. There are major flaws with it and the results it generates. Many factors should be looked upon before analyzing the results. For example, some of these social networks are oriented towards different users. Linkedin is oriented towards business focused users, while Facebook isn’t. These factors influence and create major flaws in data modeling.

In general, data modeling is the process in which formal data model descriptions are applied to a data model using data modeling techniques. It is a method used to analyze data requirements needed to support the business processes of an organization. It is a system to record data and implement data models. However, not only are data elements being defined, but also showing relationships between them. For example, data modeling can show how much internet advertising is used in each social network, but also show data showing their relationship to other social networks. Thus, data modeling can also narrow down what types of internet advertising used the most, such as business or leisure oriented or if the type of advertising is mostly for males of females. These factors are important to analyze because they show which types of internet advertising are the most effective within each social network respectively.

It is interesting to analyze the worth of social networks in regards to many different factors. I think as a society we confuse popularity with value. We believe that if a social network receives more page views it has a higher worth compared to a social network that is mostly forgotten, such as MySpace. In reality very few people even log into their account anymore, but it is surprising to note that it is worth a lot more than Facebook and it’s due to the amounts of internet advertising it holds. However, thanks to systems, such as data modeling, one can also note the areas in which MySpace isn’t worth much. That is why its worth ranges from $3 billion to $20 billion.

Citation

Kessel, J. (2008, June 23). Modeling the real market value of social networks. Retrieved from http://techcrunch.com/2008/06/23/modeling-the-real-market-value-of-social-networks/