Is There Value in Getting Involved?
This blog is an invitation to great minds from a rough and tumble practitioner of business. Criticize, collaborate, pontificate; choose your course, but please provoke the next step for this nagging collection of thoughts. Shall we put them away and get back to the real (read: cynical) world or dedicate our life to them?
The basic idea is that a new form of social capital that is attributable to social media has emerged as a distinctive contributing factor to corporate valuation and this has changed the way business is practiced. It will change decisions that management makes and how investors choose to place their money. Over the last twenty five years markets have come to accept that the sexiest part of corporate valuation – the premium that acquirers are willing to pay over market trading value – is largely attributable to brand.
However, since Interbrand Corporation, a leading proponent of brand valuation technique since the late 1980s, began publishing its list of the world’s most valuable brands in 2001, two distinct groups of valuable brands can be observed in the top 100 – “broadcast made” brands and brand valuations that are “social network made” (this later category employing powerful network technology).
Great minds will ask: Is this distinction important? And if so, what valuation techniques should be employed to “social network made” companies vs. “broadcast made” brands?