The value of e-things

Reading time: 4 minutes

Translation by AB – April 15, 2020


On May 18, 2012, only eight years after its creation, Facebook entered NASDAQ. It is already a profitable company, which achieved a turnover of 3.7 billion dollars for a net profit of 670 million euros. The estimated value of Facebook is then 104 billion dollars. At the time, we were incredulous: how, in just eight years, had a company been able to achieve such a progression? Therefore, was it the right value? A priori “yes” since the buyers were there. But were they not mistaken? Regardless of finance specialists and economists, who probably had the answers, it was still what you might call a “reasonable astonishment”.

Let us pass temporarily the question of the very fast speed of accumulation of value and observe only the valuation: 104 billion dollars, it is the GDP of Morocco or Angola, two countries of more than 30 million inhabitants; that’s the combined fortune of Bill Gates and Warren Buffett. This valuation is half that of Nestlé but for a turnover 23 times lower… The newspaper Slate asked the only question possible at that time1: “How can a free thing be worth $ 100 billion?”. Journalist’s response: it’s nonsense, so it’s a bubble… Today in 2017, Facebook is valued four times more: 430 billion2.

What do these figures represent?


If everything is mathematized today, then everything becomes commensurable and the “rule of three” a universal tool. Let’s see how.

We devote some time to our digital activities: social networking, tweeting, playing with the candies of Candy Crush Saga … If we compare everyone’s total time with the time theoretically available on the planet (7 billion x 24h per day), we obtain for each activity a Share of the Total Human Time (STHT). Thus, if everyone sleeps an average of 8 hours a day, this activity corresponds to a STHT of 33%.

So, let’s calculate Facebook’s STHT.

At the time of its IPO in 2012, Facebook had 1 billion users who spent an average of 13 minutes per day on it. This is quite enormous: it represents 0.13% of the total time available to all earthlings, nights included, excluded from the web included … However, 104 billion dollars represent 0.13% of 80 000 billion dollars (l order of magnitude of world GDP). Today (in 2017), Facebook borders on the 2 billion users spending around 30 minutes per day on the social network (from 22 to 35 minutes depending on the sources), i.e. a STHT 2017 of 0.60%, four times more than in 2011, the same progression as its valuation!

We tried it with two other digital players: Twitter and King, the former publisher of the indescribable Candy Crush Saga. The following abduction also works, if we stick to orders of magnitude:

If a social network or a digital platform establishes an inclusive and loyal relationship with its users, then its value is comparable to its share taken from the total human time available multiplied by global GDP.

Of course, this “rule” has no economic basis and is probably right only temporarily and accidentally. Despite this, it is certain that the companies of the net found how to transmute the free time into economic time3. And this phenomenon must obey some quantitative law…

Let’s finish with some refreshing words from the delicious Anne Barrattin, quite well known by French readers but rarely used in this context4:

The piano has greatly increased the value of silence.

I know some for whom social networks have greatly increased the value of real contacts and these will never be economically measurable.

1. Titiou Lecoq in – February 7, 2012 – Facebook: comment un truc gratuit peut-il valoir 100 milliards de dollars ?
2. – May 3, 2017 – La valeur en bourse de facebook atteint 430 milliards de dollars en mai 2017
3. Antonio Casilli et Grégoire Train in Le Monde – March 11, 2017 – Sur Internet, nous travaillons tous, et la pénibilité de ce travail est invisible
4. Anne Barrattin – 1892 – De Vous à Moi


September 5, 2017

In the French article La voiture du futur, c’est beaucoup plus qu’une révolution automobile (Les Echos, September 4, 2017), Julien Dupont-Calbo corroborates. In the autonomous car, there is time available:

The media, publishing and entertainment players salivate in advance. The increase in available brain time should help their business. If everyone spends 25 more minutes online in their chair, there is an additional market of $ 140 billion available to them just across the Atlantic, according to McKinsey’s calculations.

25 minutes represent 1.7% of daily time. With this estimate of 140 billion (0.17% of global GDP), and if we follow the rule proposed above, we arrive at a population concerned of 700 million to 800 million individuals, which makes us say that their forecasts seem a little optimistic for the only American territory (or that our rule is false!). But the philosophy remains the same: we shall have time to play the piano in our car.

There will come a point when, all the space-times becoming occupied, the services offered will no longer be worth much. The value of e-things is not created: it is taken up.

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