The Social Network Valuation Equation
For the past few days, there has been intense conversation surrounding the valuation of social networks. It began with Andrew Chen’s analysis of Facebook and MySpace which leveraged Google’s new Trends for Websites services.
Not only does Andrew suggest that, “social networks have weaker network effects than previously speculated” but he also suggests that not all social network users were created equal. His basis is that ad spending in the U.S. is quadruple the size of the next largest advertising market, the U.K.
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