Today reading Ross Mayfield's page, I saw an formula that suggested the additive value of social network value calculations.
Reeds law and Metcalf's (groups and links value) were added to straight numbers of nodes. N+ N^2+ 2^N, or maybe picking between the last two. But I think this is fundamentally wrong.
My intuition suggests that the power law value calculations are potential network valuations. The potential number of links or the potential number of groups... So the bigger the N, this potential value grows exponentially! But then you have the constraint of reality. How many groups can you belong to? How many links can you actively maintain? This number is lower. In fact it is dramatically lower.
So how do you determine network value? I think it may vacillate. Since it is perceived, and people focus on the potential and then on the reality of their networks, and back again, the value goes up and down.
There may be a real value - perhaps black and shoales option pricing formula could be useful... Some measure of network volatility would determine value. How big are these swings, or how often do the nodes change.
This could be a fascinating value proposition for the Blogshares market concept. Here we have a system (according to my cursory and limited understanding) that is trying to determine a value based on inbound and outbound links. But in fact these links are more representative of potential to the blog's user. If the links (particularly outgoing) are well organized, then the blog may be more valuable. If there are many links, then it can become too confusing or disconnected and thus less valuable...
Rambling here, so I'll stop. Just feel strongly that the value of these network value calculations is conflicting or constraining on each other, not entirely additive...
9:55:49 AM 
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