Does Wall Street Overvalue Social Platforms?

Thanks to Tim Reha, I had the good fortune last year to attend the excellent Future in Review conference in San Diego and have just now signed up for the 2008 event.

Mark Anderson is the impresario who hosts the conference and is the CEO of the Strategic News Service (SNS).

Unlike other “future” oriented events and newsletters, Mark focuses his attention on the view of the technology industry over the next 3-5 years. This emphasis on the near- and mid-term future applies IMHO better to those looking to make real-world investment decisions. This also may be why his prediction accuracy is considered to be unusually high.

Speaking of investments, Mark posted recently about Social networking sites and monetization at the Industry Standard site and his conclusion is that “…early projections by News Corp., Google, MySpace and Facebook are way too optimistic in online ad revenue estimations.”

While I think the current valuation of Facebook will prove to be on the high side, I don’t think that the advertising model is off the mark.

Anderson says that one lesson to be learned from the Facebook Beacon fiasco is that advertising on privacy-sensitive sites is “inappropriate” and that users will “revolt.”

I certainly agree that further invasive approaches like Beacon could lead to a revolt, but passive approaches have their place. Google users certainly don’t mind (and often value!) related ads appearing next to search results. Beacon was more akin to Google notifying friends about your recent searches.

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