Good morning,
I hope you had a happy Halloween, one of all treats, no tricks. Today will be mostly sunny day with a high of sixty-two in Whitewater – unseasonable, but pleasantly so.
Whitewater’s Common Council resumes budget deliberations tonight. The meeting’s agenda is available online.
At Science News, Rachel Ehrenberg reports that Facebook value overstated, study finds: Researchers warn of a social networking bubble in the offing. She writes that
“It’s not the same volume of the dot-com bubble. That was really widespread,” says coauthor Didier Sornette. Nevertheless, he and colleague Peter Cauwels conclude, a social networking bubble — and its impending pop — loom.
The ETH Zürich researchers argue that determining the value of social networking sites is vastly simpler than with other companies, because there’s a relatively direct link between the number of users and profit. This boils the math down to a simple equation: the number of users times the profit per user. Calculated that way, Facebook’s value is probably in the neighborhood of $15 billion to $20 billion, the team reports online October 6 at arXiv.org.
Twenty billion’s still a huge sum; the discrepancy between the lower figure and the higher one matters most to those basing commitments or investments in the company on a larger number. For day-to-day users, and (day-to-day vendors of Facebook), the company’s dependable. As a matter of valuation, though, it’s significant, as being wrong by a factor of five, for example, is a huge error.
Best bet for a price estimate on any particular day – what people would pay to buy a company. If that’s higher than the study’s estimate, then it’s the study’s estimate that’s in error.
I saw this animated penguin .gif today, although I’m not sure it’s an undoctored photo. If it should be real, then I’d like to thank the penguins involved for their contributions to human amusement. Enjoy.
