Social Media

Should We Be Valuating Social Media Users by Stock Prices?

According to a new post by Forbes, a social media user can be given a dollar value. Their calculations on Linkedin, Twitter, and Facebook’s stock valuations divided by their user base gives them the following price that each user is “worth,” from a monetary perspective:

Twitter has a $25.5 billion stock-market capitalization, based on its trading price of about $46.50 late in Thursday’s New York Stock Exchange trading. The company has 232 million active users, so…each user is being valued at $110.

For Facebook: a market cap of about $117 billion, spread across 1.19 billion active users. That computes to a per-user valuation of slightly more than $98.

And for LinkedIn, pencil in a market capitalization of $24 billion, built atop an active user base of 259 million people. Now we’re talking about a per-user valuation of slightly less than $93.

These calculations come at the heels of Twitter’s first day on the New York Stock Exchange, which started shares at $26 and ended at $44.90, an increase of 73%, according to USA Today.

While the valuation of $110 per Twitter user, $98 per Facebook user, and $93 per LinkedIn user certainly provides fodder for social media experts, the fact remains that valuing users on a monetary basis may not be the best approach, especially since the stock market varies wildly (For example, as of this post, Twitter stocks are now $43.09, a decrease from Forbes’ input of $46.50).

User Activity

If we are giving users a monetary value, it stands to reason that other factors should be taken into consideration, including active use, engagement, followers/likes/connections/friends, and influence.

A Twitter blog post gives their figures of user value to businesses based on the fact that the average Twitter user follows five brands.

In addition, users may also be more valuable to businesses, depending on their tendency to purchase items because of social media influence,  The Huffington Post reminds us.

Finally, no matter how we decide to value users, the fact remains that inactive and spam accounts will always skew data.

Do you think social media users should be given a valuation? If so, who is most valuable?

photo credit: rednuht via photopin cc

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When she's not editing and scheduling posts or working with writers to make SEJ better, Kelsey Jones helps clients around the world grow their social media, content, and search marketing presence under her agency, MoxieDot. She has been working in digital marketing since 2007 and journalism since 2004.Kelsey enjoys writing and consuming all kinds of content, both in digital and tattered paperback form.
524312 890979679367 1444089661 n+%25281%2529 Should We Be Valuating Social Media Users by Stock Prices?
524312 890979679367 1444089661 n+%25281%2529 Should We Be Valuating Social Media Users by Stock Prices?

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