What we report below is an interesting inquiry lead by TechCrunch’s Michael Arrington, about the real value of social networks. For the first time (as far as we know) Arrington tries to evaluate networks not just by the number of their active users but also considering the “advertising value” of those users, based on the country they live in. The result is a “weighted average” of users’ value, you can find the data below:

This is a very interesting point of view, but what we’d like to highlight here is the importance of non-quantitative data. As, again, Michael Arrington himself puts it:

“this model doesn’t take into account execution at the company level. Two very similar networks may monetize vastly differently based on methods of advertising and even the brute effort and passion of the employees. This model obviously doesn’t take that into account.”

Therefore this models fails completely at evaluating the quality of users data and the quality of advertising itself. We’ve tried to highlight this phenomenon on regard to Facebook in our previous “Marketing 2.0 for dummies” post, in particular:

“Nowadays you sign up on Facebook with your real name, you fill in real info about you, and you have tons of applications related to movies, music, favorite drinks and quizzes in general which are all games people play eagerly. Not minding about the fact that while you play Facebook gathers information about you and profiles you in detail. In the beginning of the social internet most applications didn’t even know the real names of their users since every info was fake. The result is: Facebook knows my music tastes exactly!”

This doesn’t happen with all (if any) networks, therefore the value of advertising might differ a lot from network to network, not only from country to country.

Do advertisers take this into account? We don’t know, but this is likely to be the factor at the basis of Facebook 15 billion vs. Bebo 850.000 valuation.

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