Facebook valuation by way of Whopper

I don't think what Kottke's doing here makes much sense. The basic premise is, Burger King has a Facebook app called Whopper Sacrifice that lets you delete 10 friends in exchange for a free Whopper. This sets up a Facebook-friend-Whopper exchange rate. After determining the value of a Facebook friend in terms of Whoppers, he then determines the value of Whoppers in terms of dollars, and, presto, comes up with the dollar value of a Facebook-friend.

But there is a problem here. Once Kottke gets the dollar value for a Facebook-friend, he then multiplies that by the total number of friends in the Facebook network to arrive at a valuation of the network. But this doesn't make sense, because it's not as if Facebook friends are a commodity (like Whoppers) that are, for all intents and purposes, interchangeable with each other. Some friends are more valuable than other friends. I may happily exchange my least favorite ten friends on Facebook for a Whopper, but decline to do the same when it comes to my ten most favorite friends.

Assuming an efficient Facebook-Whopper market, what this scheme does do is set the cost of keeping a Facebook friend to 1/10 the cost of a Whopper. This is, I think, a win-win for everyone involved, because it will purge the Facebook network of non-meaningful friendships and get Burger King some nice publicity.

Of course, there also seem to be some perverse incentives, like for instance friending strangers just so you can unfriend them for Whoppers. But presumably the app is robust enough to guard against this kind of exploitation (for example, it could be that you must be friends for a person for X amount of time in order for your unfriending of them to count towards a Whopper).