How Much Are Your Favorite Social Networks Worth?

September 27, 2010 By 1 Comment

Facebook: $33 Billion

In February, SecondShares, a group of four that provides analysis "on the companies driving the social media revolution," released a report that argued Facebook, "the most powerful website the world has known," will soon be worth more than $100 billion. Most people, though, seem to be arguing that the company, which has more than 500 million active users, is worth somewhere between $23 billion and $33 billion. Forbes recently estimated that CEO Mark Zuckerberg is worth $6.9 billion by figuring Facebook's overall value to be $23 billion, but investors have paid up to $76 for a single share in the company, assuming it could be worth significantly more.

Twitter: $1 Billion

They haven't really found a way to make money yet, but the founders of Twitter know how to build a product that nobody knew they wanted until it existed. The microblogging service, which forces its roughly 50 million users to craft messages in only 140 characters or less, is set to close a $100 million round of financing any minute now even though it's still sitting on $30 million left after its last round. With investors as varied as Insight Ventures Partners and T. Rowe Price, Twitter has been valued at $1 billion, four times its valuation in February.

Zynga: $5 Billion

In April, SecondShares, a group of four that provides analysis "on the companies driving the social media revolution," released a 4,000-word report that concluded Zynga is the clear leader in social gaming, a rapidly growing and highly profitable industry. They valued the company, best known for the addicting crop-growing game on Facebook and other platforms, FarmVille, at $5 billion, giving it room to grow. Only a couple of months prior to the release of SecondShares' report, research firm Next Up valued the company at $3.3 billion.

LinkedIn: $2 Billion

With more than 70 million members, LinkedIn is often referred to as the Facebook for professionals looking to network. After raising more than $76 million in investor funding back in 2008, LinkedIn's executives have said they don't yet need to go through another capital-raising round. Tiger Global Management LLC, a hedge fund with investments in private technology companies, valued the company at $2 billion as recently as late July.

MySpace: $500 Million

Considered by some to be worth almost $65 billion back in 2007, MySpace is now probably worth less than the $580 million that media maven Rupert Murdoch paid for it. Murdoch wanted Yahoo to value the company, now used primarily by amateur bands for self-promotion, at $10 billion after he bought it. The company wouldn't agree to it, no merger happened and MySpace has been rapidly declining ever since.

Groupon: $1.35 Billion

A venture that allows groups of people to commit to coupons so that they can all receive an exceptionally large discount that wouldn't be possible were the offering company not guaranteed a bulk buy, Chicago-based Groupon was valued at $1.35 billion earlier this year when it raised $135 million in a fourth round of financing. But, as the the site is rapidly expanding and has received a lot of favorable press in the months since, it could be valued at even more today.

Foursquare: $95 Million

Foursquare is still new, but it's adding more than 15,000 users every day. When the social location start-up raised $20 million in only its second round of funding back in late June, the company was valued at a healthy $95 million. Both Facebook and Yahoo showed an early interest and were in talks with the company's executives about acquiring it prior to that funding round. The deals didn't work out, but Facebook has since launched a similar service, Places.

Hunch: $52 Million

Started by Caterina Fake, the social media genius behind Flickr, Hunch is probably the least-known of the sites included on this list. Fake, though, has the Midas touch and her latest project, an algorithm-based site that attempts to tell you what you will like, was valued at $52 million after raising $12 million in a financing round this past March. Several big names believe in the future of Hunch: Wikipedia founder Jimmy Wales and Gideon Yu, one-time CFO of Facebook, both joined the company's board of directors.

Skype: $2.5 Billion

With incredibly low rates, Skype has become the international online calling company of choice for millions of users. EBay valued the company at $2.75 billion when it sold it off last year, but the estimated value hasn't gone up much since, with most people pricing it between $2 billion and $3 billion.
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Global Voices, Ethan Zuckerman

September 10, 2010 By Leave a Comment

Although we know the web connects the whole world, most of us end up connecting mainly with people similar to ourselves. In this video, blogger and geek Ethan Zuckerman shares his desire to link the whole of the wider world, using smart tactics to open up your Twitter world and read news in various languages.

Ethan Zuckerman is an activist and blogger, living in Western Massachusetts and working in Cambridge as a research fellow at the Berkman Center. As co-founder of Global Voices, Zuckerman says, "I'm interested in ways that citizen's media can address longstanding biases in the news media."

Rebecca MacKinnon and Zuckerman founded Global Voices in 2005 when they were both fellows at the Berkman Center for Internet and Society. "Initially," says Zuckerman, "we'd planned to build an aggregator of blogs from around the developing world, based on my interest in Africa and her focus on China. As more people got involved with the project, it's become something much larger and more exciting: a global community of citizen media authors, an advocacy group that works to preserve freedom of speech online, a media development organization that promotes participatory media in developing nations, a vast and distributed translation project, and a crazy set of friends from every corner of the world. It's been a joy to be involved with and is one of the projects I'm proudest of."

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Social Network Structure: Get Them to Absorb Your Message!

September 9, 2010 By Leave a Comment

A recent study by MIT examined how social network structure can influence how behaviors and information spread through a population. Understanding the way information moves through social media is imperative to using these resources to effectively market a product, brand, or person.  While the study at MIT focused on how health centered behavior travels through a community, the information obtained can be adapted to the consumer driven marketplace and applied effectively through online marketing campaigns.

MIT believes that all social networks can be described by one of two basic categories: clustered contact networks and casual contact networks (Respectively illustrated by the image provided by MIT below). Clustered contact networks spread complex information much more efficiently and to more people than casual contact networks.

“These figures show experimentally manipulated on-line social networks. The first community (left) has a clustered network structure, while the second one is a more "random" casual contact network. Node colors indicate people who adopted a behavior (blue) and those who did not (white), with lighted links showing the active pathways of communication. The clustered networks spread the behavior to more people than the casual contact networks.”  (http://web.mit.edu/press/2010/health-networks.html, accessed 9/8/10, article by Peter Dizikes, MIT News Office)

Before this study, it was the widely accepted and presumptive wisdom that casual contact networks, with intense activity and the ability to touch more people, would spread habits and ideas more quickly than the clustered model.  It was thought that clustered contact networks were redundant and therefore less efficient. Damon Centola, an assistant professor of system dynamics and economic sociology at the Sloan School of Management decided the opposite. “People are more likely to acquire new health practices while [participating] in networks with dense clusters of connections- that is, when in close contact with people they already know well.” In order for people to actually change their habits, especially something as ingrained as health practices, they need the redundancy and “extra reinforcement” provided by these communities. Just like Pavlov’s dog, you need to hear something a few times before you actually alter your perceptions or behaviors.

How can we apply this to online marketing through social media? The answer is obvious. It’s not all about how many friends or followers you have- or your ability to transmit information to them constantly. People who are more integrated into your life are going to have a greater impact on the decisions you make as well as who you are. We are psychological beings. Therefore, something equal in complexity to health information should be transmitted in a way that is not entirely based upon mathematical equations or numerical values.

While the study practically “begs” for more research, there are things you can do now. Integrate your brand into your audience’s online activities and become an active presence in a related community for your product to take hold. Become a voice on a blog, post to various forums, and make sure your message has meaning and purpose. But then again, it depends on the complexity of what you are trying to communicate. Be wary of the approach you take- convincing a community to vote for a particular politician is a lot harder than advertising a candy bar.

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Dangers of Foursquare

July 2, 2010 By Leave a Comment

Over the past month, I have become completely addicted to checking in to my locations, earning badges and conquering the title of mayor in a new location-based social networking game called Foursquare.
For those who do not play Foursquare on their smart phones, here is the premise of the game; You “check in” to a location on a map, earn points for checking in, eventually earn badges for checking in enough times to enough places, and most excitingly, you can even receive the title of mayor of a place for being the person to check in most to that particular location, like a restaurant, your work, or your own home.
Again, I have been happily playing Foursquare now for about a month, and I have to admit, it took me about a month too long to realize the potential dangers of Foursquare.
A few days ago a friend approached me to warn me about the constant Foursquare updates that post on my Facebook wall. He warned me that making my locations public is just an invitation for creepers and bad people. So true. I thought back to all the previous places I checked in and the messages I often attached to each check in, telling anyone who checks my Facebook or Twitter accounts where I am at most times, including where and when I work, where I workout, where I love to eat and where I sleep.

If you think about it, this is the perfect invitation for a robber or stalker. Someone up to no good could easily see what days I work and will be out of the house, or when I am out at the gym or out to dinner. I have never personally done this, but people also tend to post the house addresses of their friends and family, which just sets up disaster for others too.

Foursquare has 150,000 users, and the site leaves the decision up to the users whether or not to post their specific location. A fantastic app, fun for the consumer, and brilliant for the businesses. All I can say is think about what you post before you post it, or follow my rules and check in as your leaving! Use discretion, and for god’s sake, do not leave your home address and a message reading, “Gone on vacation, be back in a week!”

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