Michael Arrington talks about a new model he created to assess the market value in online social networks. As hard as it can be to place a market value on a person, it’s almost more complicated to place such a value on an online social network. Arrington looks at MySpace, Facebook, Bebo, Hi5, and LinkedIn, among other sites, and creates a model that includes the number of unique visitors the site gets, the number of worldwide users, and the site’s total revenue.
He points out that one of the issues with his model is that each social networking site is different in its focus; I would add to this that each site has a very different user base. (He does point this out for LinkedIn, which is purely a place to connect virtually and not a site on which you can play games or babble back and forth.) I have profiles on all the sites I listed above (which is partially because I used to be a high school teacher and partially out of personal interest), but Facebook is definitely the only one I use with some regularity. There is obviously a lot of money to be made from advertising on the sites, which in turn might make some people interested in actually purchasing the sites, but it still seems shaky to equate any “values” between sites since they are all so different in nature. People on each site have different buying powers, people spend different amounts of time on each site, people go to each site with different motives, etc.
I should add here that I am part of one of Andrew’s projects on political polarization, and we ran a survey on Facebook as part of that project. It’s not cheap to target Facebook users; it is, however, a nice way to target users with specific interests because they list their interests in their profiles. Then again, Facebook users are overwhelmingly within the same age range and at a similar level of education, so it’s not a hugely diverse or population-representative respondent group. We paid for it though, and maybe that’s exactly the point.