OK, so if you replace his 38% chance of $200B with 28%, the valuation is still $79B. I think the qualitative point about upside potential stands, unless you find it completely unlikely that they will succeed big.
Based on similar fates of previous social networks / instant messengers de jour. Every few years a new generation of users grew bored with one beehive and collectively left it for a new one. IRC/ICQ/AIM/YIM/MSN/Friendster/MySpace couldnt avoid this fate even everybody thought they could. No evidence points out that FB will be able to avoid people getting bored with it after x years.
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You seem to be missing the 10% or so chance that Facebook is obsolete in 5 years time.
OK, so if you replace his 38% chance of $200B with 28%, the valuation is still $79B. I think the qualitative point about upside potential stands, unless you find it completely unlikely that they will succeed big.
How do you calculate that chance?
Based on similar fates of previous social networks / instant messengers de jour. Every few years a new generation of users grew bored with one beehive and collectively left it for a new one. IRC/ICQ/AIM/YIM/MSN/Friendster/MySpace couldnt avoid this fate even everybody thought they could. No evidence points out that FB will be able to avoid people getting bored with it after x years.