Large data value geometry?

According to foreign media reports, what users buy food, what Facebook posts praise, how to use car GPS (Global Positioning System), many businesses rely on such data collection and sales.

The problem is that no one knows the true value of this information. The data are not physical assets, such as factories or cash, and there are no guidelines for their valuation. As more and more companies buy and sell information, using large data analysis tools to find ways to generate revenue, the absence of a measure of the value of data makes our understanding of the modern business world a major flaw.

Leonard Nakamura, an economist at the Federal Reserve Bank of Philadelphia, Lennard Nakamura that the company's data, as well as "intangible assets" such as patents, trademarks and copyrights, are worth more than $8 trillion trillion (about 49.1264 trillion yuan), equivalent to GDP in Germany, France and Italy ( Gross domestic product (GDP).

The problem of data value is not limited to the technology industry. Kroger, a supermarket management company, records the customer's shopping history with more than 2,600 stores and about 55 million card users. Kroger filters the data to predict trends and sells information to vendors through a joint venture. Companies such as Procter and Gamble and Nestlé are happy to buy this information because it allows them to better meet customer demand for their products and marketing campaigns. Analysts estimate that Kroger's revenue from sales figures for $100 million a year (about 614 million yuan).

The United States Financial Accounting Standards Board (Financial Accounting Standards Board, hereinafter referred to as "the FASB") has yet to update accounting standards for economic and social matters that are increasingly important for information and intellectual property, The FASB discussed intangible assets two times in 2002 and 2007, but was stranded by the complexity of the problem. Last month, some members again proposed that the FASB study intangible assets matters. One of the problems facing intangible assets is whether the time the employee collects the data should be recorded as cost or investment.

Companies must also estimate the effective time of their data, determine future growth prospects, and record and report changes in the value of the data. It is relatively easy to analyze data on physical assets such as factories, but there is no precedent in the field of intangible assets.

The lack of a uniform measure of the value of data has created a particularly large blind spot for investors in companies such as Facebook, ebay and Google. These companies rely on the collection of user data to generate revenue.

"Many of the company's operations are not reflected in information or financial statements that are disclosed to the public," said Glenn Konick Glen Kernick, managing director of Duff &phelps, investment banking and valuation consultancy. "Facebook, ebay and Google have a net asset value of $125 billion (about 767.6 billion yuan), but their market capitalisation is as high as 660 billion dollars (about 4.0529 trillion yuan), and the difference between two data shows that market-approved search algorithms, patents and data are worth the intangible assets of companies. , these assets do not appear on their balance sheets, which allows many investors to value companies based on other volatile indicators, such as cash flows or future growth prospects.

"If you can't generate revenue, the data is worthless," said Laura Martin, a market research firm Needham &co analyst Laura Martin. "As user interest changes, user information loses their value." This makes the data a perishable commodity, which is more difficult to value.

But it is dangerous to rely solely on markets. In the bursting of the tech bubble in 2000, many investors were wiped out. It was widely accepted at the time that traditional valuation and risk assessment criteria were not suitable for the "new Economy".