Unless you’ve had your head buried in the sand about financial news, Facebook will be offered to investors as an issuance of stock. Since this is the first issue of stock to the general public, know as an IPO, there has been some speculation as how much the stock will be offered and at what price each share will be. Estimates would value Facebook at $95 Billion. !!!
What exactly is Facebook ? Oh, it’s a social network (internet) site that just about anyone on the internet knows about. But what IS Facebook, is their headquarters worth billions? You can’t touch Facebook unless you want fingerprints all over your display, monitor screen or smart phone.
What you getting for your share of stock is a bunch of electrons. These electrons of course are arranged by the knowledge workers at Facebook. It’s the softwear or instructions that allow users to interact or more importantly format information into a readable and interact able design (website). It’s customizable within formats to allow the user(s) to have their contacts, friends, relatives, likes and dislikes organized for easy viewing and feedback. Facebook doesn’t build hardware like computers and smartphones. Facebook just arranges electrons in a way that’s popular to the general public.
This isn’t a new concept, software isn’t a new concept. If a product can be digitized , it can be bought or sold with out it physically existing. Did your ever open a video game cartridge to actually see what was in it. Basically circuits to order the electrons of your game console. A floppy disk, just a collection of magnetic pulses, optical disks? the same, just a collection of miniature reflections from a rotating surface to order the electrons by instructions and information read by a light (laser) beam.
Enter the internet, we even don’t need the media anymore, the electrons are passed back and forth by computers now globally connected. Over a period of time, by digitizing, media formats were laid to rest, photography went digital, now publishing actual print is dying. Music, download is the key word. Even financial, a swipe or pass of the RFID plastic is all it takes, the obsolete media is paper money and checks.
What the winning element is is that the software is a generally accepted user interface. If a software company can get it right and accepted by the masses, grow and improve the interface, it wins. Popularity makes up a good portion of the value. So does it’s ability to be a place for advertisements and ripe for data mining of it’s customers. Predictive analysis is key to gauging consumer pattern as the mountain of data grows to be parsed.
How much are we willing to pay for the orderly arrangement of electrons? Time will tell, maybe the next consideration won’t be what OS (Operating System) you’ll have on your digital device but what AI system you’ll have.
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