the fungibility of social networks
// first draft: 17/12/2013 - NASDAQ:FB @ 54.61
This is gonna be a short one, because it's just another fish in the vast sea of blog posts discrediting facebooks overblown valuation (currently at 133B, with a P/E ratio of 114) . the argument against this valuation is in the title already. I believe that long term there is only one important social network (meaning a digital projection of your real life connections) - namely your address book on your smartphone.
any application can access this phone book. your telephone number serves as a perfectly valid universal ID and hence any new social network will not have to overcome the burden of creating new links/connections (or friendships) between users. all the nodes are there, saved in your smartphone.
facebooks valuation would be justified without address books - and because for a long time during its early years it was the most complete, centralized resource of connections between people. the hype was understandable. but with the possibility for apps to access all this information at once, this advantage becomes moot and hence an indistinguishable feature for any upcoming social network. this is great news for the users, because we can now move between social networks as much as we want, as long as we are willing to share our mobile phone number. it's not so great news if you are a shareholder of a company which runs a social network.