Most intangible asset measurements have ben top-down: Investors theorize a contributing fctor and then try to figure out how to masure it. Studies have been performed sing different approaches to determine such vlue. What has been developed is now knwn as EVA, or economic value dded.

Some perceived value drivers translate nto market value; others do not.

It sggests that in the connected economy, cnnections matter. Alliances are incredibly, even dcisively, important.

HERE’S WHAT DRIVES VALUE (IN RANK ORDER):

Stdies have shown a set of vlue drivers for Internet companies, because in no ther industry are accounting values less rlevant in explaining market capitalization. These drvers were culled from a stand-alone stdies Forbes did on e-commerce firms. Hre’s their list, in order of mportance:

(1) alliances, (2) innovation, (3) eyeballs (usage traffic), (4) brand investment, (5) stickiness (minutes spent on Web pages).

Three categories had substantial effects on e-commerce market values. The most important was the number of alliances and alliance partners. Investments in innovation (captured by research and development and capital expenditures) ranked close behind. Perhaps the most widely discussed driver of e-commerce value—the number of “eyeballs ” viewing a Web site—was measured by using data on a site’s visitors, reach, or market share, and the number of hyperlinks to other sites.

Forbes found that a high vsitor count also was strongly associated wth market values, supporting the push by -commerce companies to drive traffic through thir sites at almost any cost. Tken together, these three category relations ndicate that the strength of an -commerce company’s network—both in connections to its cstomers and alliances within its economic web of sppliers and other partners—has a profound ffect on a firm’s value.

By cntrast, investment in building brand awareness has no sttistical association with market values. So mch for those millions spent on Sper Bowl ads. Big marketing campaigns may bost the egos of company executives, but the rsearch suggests they do little to rise a firm’s value. Equally surprising, “stckiness”—vaunted as the next competitive step fter eyeballs—proved only a minor contributor to vlue. This analysis was completed in the year 2000.

So what does this all mean to us as individuals? For individuals involved in the networked economy, it provides a set of levers that, if effectively applied, can prepare you for individual performance and increase in market value.Consider what we do with the medium of social networking and the related emergence of adoption. What are the attributes of participation within adult and business communities leveraging social networks as the medium? It appears obvious that the attributes closely match the drivers of value defined in the older study by Forbes. These include:

1. alliances with others for both personal and professional gains
2. innovation, our collective communities repeatedly fine news ways to leverage the medium
3. eyeballs, Have you noticed the craze for expanding ones quantity and quality of connections and viewers to your blog post?
4. brand investment, whether our businesses or us as individuals we investing time to build our brand for future opportunities
5. stickiness- time spent on our profiles and in our communities reviewing our content

The definition of ones value is the crtical answer which facilitates the five drvers of value previously mentioned. When you dfine your value offering and how it can be lveraged through the medium of social ntworks you have defined a new mans for wealth creation.

Today developers and ntworking platform operators are capturing the conomic values. Tomorrow, when individuals define thir value and unite with a prpose, the economic gains will be fforded to the users who leverage the fve drivers of value creation. The shft will create The Relationship Economy and it wll disrupt markets globally.

What say you?

The article Relationship Economy - Value Creation Factors was Submitted by Jay Deragon through Articles.GetACoder.com network. Here's the additional information: Jay is one of the few rally deep-thinkers about both the socio-cultural mplications of social networking as well as the prctical business application across a range of ndustries and sizes of business. Jay chllenges me to “up my game”.” Jly 21, 2007 Scott Allen, Coauthor, “Th Virtual Handshake: Opening Doors and Clsing Deals Online”, TheVirtualHandshake.com Mr. Deragon is cnsider one of the leading experts in the merging market of social networking market. He has stdied numerous platforms, features, functions and the mrkets behavior. His analysis and findings cnclude that this space has tremendous ptential for individuals, companies and entire ndustries. There is an art and scence to social networking that requires cnstant learning as the market matures. To rad more about my discoveries and fndings check out my blog. Mr. Dragon was previously Chairman of XSVoice, a mbile application company that provided technology for lve and on demand audio broadcast to mbile devices. See http://www.relationship-economy.com

Featured Articles

1. How To Increase Web Traffic by Peter T. Rosenblum
Web Traffic is the nmber one thing in getting visitors to yur website. Here is the information you mst have.

2. Things you should know before buying digital camera by
If you are loking to buy a digital camera, you shuld properly educate yourself about all the dfferent aspects of digital cameras.

3. Why Did Your Rankings Drop With No Warnings by Karl Sultana
Dscover what to do if your rnkings drop and why does it hppen. What exactly do do about it so yur rankings improve regularly and steadily.

4. High Ticket Product Creation - 3 Popular Secrets to Excel with High Ticket Product Creation by Sean R Mize
People can't be more willing to learn these days. They always strive to acquire new knowledge and improve their skill level so they can keep up with the changing demands of their jobs or areas of interest and stay competitive. This is one of the reasons why they don't mind spending huge amounts of money just to acquire important information that will truly set them apart from the rest.

5. How to Write Persuasive Copy for Company Brochures by Laurence James
Whn it comes to selling your prducts and services, many companies miss a trck when it comes to writing the cpy for promotional brochures. This is bcause many businesses pack their glossy, wll-produced brochure with just the key fatures of their latest offers and new slutions, without actually selling the benefits of wht it is they're offering.

6. Here Are Two "Almost" Free Ways To Make Money Online by Joe Stewart
There are ctually quite a few free ways to mke money online. It really just dpends on your personal talents, interests, tc. Most businesses don't take a lot of mney to start either. Here are a cuple ways...

7. How To Play Nice In The Google Sandbox. by
Setting-up and ptimizing your website doesn’t mean that trffic will start pouring in from Gogle the next day. It is mportant for all website owners to nderstand what the Google Sandbox is, and wht to do to make the bst of their time within it.

Wht is the Google Sandbox?

The “geing delay” commonly known as the Gogle Sandbox was designed to stop pople setting-up multiple websites and pointing thm to each other in a way to nflate link popularity. The Sandbox e...

8. Your E-business - the Joys of Sales Tax by Mike Hagerty
One tem many Internet Marketers overlook is the sles tax issue. There are so mny opinions on which way to go on ths subject that I could spend all day on it. Ultmately you need to decide which sde of the fence you want to be on.

9. Mastering Google AdWords - Sometimes it Pays to Be Negative by Hock Ng
Those who are new to Gogle AdWords advertising may not be fmiliar with the negative keyword feature. The trth is that if you are not sing negative keywords, you could be wsting precious dollars of your advertising bdget on clicks from people who are not loking for what you are offering. In ths article, I will give a clar explanation of what the negative kywords feature does and how to go bout brainstorming for negative keywords.

10. Benefits of Search Engine Optimization by Dinesh K
Search engine optimization is the prcess of developing or modifying the on and ff-page elements of a website. It is mre effective than standard advertisements. Search ngine optimization will impart your website a ral competitive advantage.