It will not only be important to estimate what "value" really is
but how robust it is. If you make a technological leap which needs
a lot of research investment and which is difficult to copy, then
this is value which is robust. Real resources like oil or
level of education are such robust values. FB has
generated a lot of robust value in building up all the infrastructure and
code. But the value of FB includes also networks of people
which is also value but is fragile because it is based also on reputation
and coolness. If you sit on a real goldmine, you do not have to be cool.
You will make money. If you sit on a virtual goldmine like FB, you
have to remain popular to please investors and make money. This makes me side more with Steve Blank
in the economist opening statement.
However, facebook now also has the power to grab and crush smaller competitors
and harvaest their talent. The fact that they get the best in the industry
might mean that they will start entering more robust markets like entertaining,
news etc. This makes me believe also Ben Horowitz. We will have to wait and
see.