23 September 2012

New Media and Future Valuations

If we regard a (future) new media company, how do we evaluate it. The issue is that the context is undefined as is the time. By this I mean that there isn't that temporal length and context by which one can evaluate most other companies. One might assume that such factors give a stability in which growth can happen. Otherwise the market cannot value, except on its own inherant valuation. Now, that may not be a problem, if the market is such that it can value on future income streams

If the market is saturated with money flow, it may not be able to do this. One might say that the potential for growth may be a reflection of the actuality of growth in the market. These are functional events independant of external valuations.

A new media advertising based company, of any kind, can be expected to have an income stream, given certain conditions. The very fact that one can say that one needs a certain number of visitors to generate a decent income, is a strong statement for any income statement, virtual or otherwise. It puts income into a kind of computability and generatability. But what does that mean for future valuations.

For those are after all that which enables compounding. It may be that future markets will rely on this more rather than less, as there may not be steady asset growth, or asset related or reflective growth. It means the company is continually referenced to its performance now, but with a stability that it will perform, unless very major changes happen to it.

So its earning predictability is a function of its existence as presently defined, that is not a future valuation frame of reference. So what will compound, well that growth, but then we are in concrete reality of worrying whether such growth can continue. So it comes down, to this, how confident are we that a new media company can actually grow.

However these are positive directions, as they give a realistic stability in theory to the aggregation of valuations. So what would that do that which brings shares to future valuations. Perhaps reinforce such structure over time. Bear in mind, the potential for such companies is only at a very early point.

Whether this explodes like tech, grounded in developments in electronic miniaturization technology, remains to be seen. That is probably a factor of the environment within which these developments may happen.

That is, the liquidity at which things can be developed is a highly important factor. This is because what it is that works, is not clear. In a highly competitive fine grained environment, it may not be. Now that points to the need for developmental liquidity and intruiguing partly adaptive developmental avenues (partly adaptive to the grain).

© 2012 Guy Barry - All Rights Reserved.