Why Facebook Stock is Undervalued: Facebook Credits

First of all, I am not an analyst nor do I own any stock in any public company. The last time I did invest in a promising Internet company ended in a disaster, thanks to Deutsche Telekom. 

Nonetheless, I believe the Facebook stock is undervalued. Everyone who believes in the company will tell you that there is huge potential in its 900 million users, but most of them will talk about new forms of advertising or tailored experiences through the social graph. I think that’s all small change and not the true money maker. Advertising revenue is far too unstable to build a lasting company, even Google has been spreading out into other verticals for a while now which I believe is pretty telling. No, the true value of Facebook lies in its own currency: Facebook Credits. 

No one is talking about it as at the moment Facebook Credits are just a convenient way to get access to games on the social network, but I don’t believe that this is the real plan behind having your own currency. As I had a pretty successful online teaching career, I noticed early on how difficult it still is to send and receive online payments in the global market today. There are huge parts of the world’s population who have access to the Internet but cannot pay for goods and services, even if they want to. One could say, there is a large group of Internet window shoppers out there. 

I have been actively teaching between late 2008 and early 2010 but astonishingly not much seems to have changed in the meanwhile when I checked the different options lately. Some startups in the education space put in some really heavy work to offer as many payment methods as possible, for example italki was famous for adding one more payment provider every couple of months. Yet, it did not help them to reach a really big market.

The reason for this is probably convenience and a lack choice. Most of these payment methods involve several steps, it’s not comparable with simply recharging your PayPal account. If you take cashU as an example, a quite popular payment method in the Middle East and North Africa,  you need to find a shop that sells the cashU cards which can be a first hurdle to clear. And the percentage the provider takes for the amount you charge on the card is also pretty hefty. Last but not least, you have to calculate what amount you charge to use the card efficiently as you don’t want to have money left on the card that you cannot use. All in all, many steps to take that are contrary to the usual impulsive behavior of buying on the Internet. 

I also don’t think that people will go through all this in order to get access to one particular service. You would really, really want to learn something with a particular provider in order to invest all that time and hustle. If you don’t have at least ten different options to spend your money on you might as well do just fine without even this one option. 

Facebook Credits on the other hand are the perfect solution to all of this. Firstly, most of these potential clients are on Facebook and very familiar (probably more than I am) with the different games and services the social network is offering. If (as soon as) Facebook offered its prepaid cards in shops in the Middle East, India, China, Africa, South America etc advertising revenue would look like peanuts. 

Sure, there have been many storefronts closed on Facebook lately but then Facebook did not really push for its currency yet. Most payments were done by other providers what added an extra and unnecessary layer to the process. Facebook payments need to work like Amazon, e.g. one-click-payment and that would be the case with Credits. 

Facebook already did tests with those cards in the US and the results seemed to be promising. And as soon as you add Facebook’s mobile strategy to the picture, you’ll get another potential revenue stream: mobile banking & p2p payments. Facebook Credits on mobile phones could become a huge competitor for M-PESA as Facebook would be able to offer far more additional services like online shopping for instance. As recent as February, Facebook made a partnership with Orange to bring the social network via Unstructured Supplementary Service Data (USSD) to Africa. 

Of course, Facebook Credits would also spread into the real world. There is no reason why you should not be able to pay for your espresso with Facebook Credits. And that ties in check-ins, reward programs, personalized coupons & ads - you name it. 

All in all, Facebook Credits have the potential to become a kind of unofficial world currency and Facebook would earn on each single transaction. That’s the true power of 900 million users, forget the ads.

Picture lev radin / Shutterstock.com

Big Think Edge
  • The meaning of the word 'confidence' seems obvious. But it's not the same as self-esteem.
  • Confidence isn't just a feeling on your inside. It comes from taking action in the world.
  • Join Big Think Edge today and learn how to achieve more confidence when and where it really matters.
  • Prejudice is typically perpetrated against 'the other', i.e. a group outside our own.
  • But ageism is prejudice against ourselves — at least, the people we will (hopefully!) become.
  • Different generations needs to cooperate now more than ever to solve global problems.

Yale scientists restore brain function to 32 clinically dead pigs

Researchers hope the technology will further our understanding of the brain, but lawmakers may not be ready for the ethical challenges.

Still from John Stephenson's 1999 rendition of Animal Farm.
Surprising Science
  • Researchers at the Yale School of Medicine successfully restored some functions to pig brains that had been dead for hours.
  • They hope the technology will advance our understanding of the brain, potentially developing new treatments for debilitating diseases and disorders.
  • The research raises many ethical questions and puts to the test our current understanding of death.

The image of an undead brain coming back to live again is the stuff of science fiction. Not just any science fiction, specifically B-grade sci fi. What instantly springs to mind is the black-and-white horrors of films like Fiend Without a Face. Bad acting. Plastic monstrosities. Visible strings. And a spinal cord that, for some reason, is also a tentacle?

But like any good science fiction, it's only a matter of time before some manner of it seeps into our reality. This week's Nature published the findings of researchers who managed to restore function to pigs' brains that were clinically dead. At least, what we once thought of as dead.

What's dead may never die, it seems

The researchers did not hail from House Greyjoy — "What is dead may never die" — but came largely from the Yale School of Medicine. They connected 32 pig brains to a system called BrainEx. BrainEx is an artificial perfusion system — that is, a system that takes over the functions normally regulated by the organ. The pigs had been killed four hours earlier at a U.S. Department of Agriculture slaughterhouse; their brains completely removed from the skulls.

BrainEx pumped an experiment solution into the brain that essentially mimic blood flow. It brought oxygen and nutrients to the tissues, giving brain cells the resources to begin many normal functions. The cells began consuming and metabolizing sugars. The brains' immune systems kicked in. Neuron samples could carry an electrical signal. Some brain cells even responded to drugs.

The researchers have managed to keep some brains alive for up to 36 hours, and currently do not know if BrainEx can have sustained the brains longer. "It is conceivable we are just preventing the inevitable, and the brain won't be able to recover," said Nenad Sestan, Yale neuroscientist and the lead researcher.

As a control, other brains received either a fake solution or no solution at all. None revived brain activity and deteriorated as normal.

The researchers hope the technology can enhance our ability to study the brain and its cellular functions. One of the main avenues of such studies would be brain disorders and diseases. This could point the way to developing new of treatments for the likes of brain injuries, Alzheimer's, Huntington's, and neurodegenerative conditions.

"This is an extraordinary and very promising breakthrough for neuroscience. It immediately offers a much better model for studying the human brain, which is extraordinarily important, given the vast amount of human suffering from diseases of the mind [and] brain," Nita Farahany, the bioethicists at the Duke University School of Law who wrote the study's commentary, told National Geographic.

An ethical gray matter

Before anyone gets an Island of Dr. Moreau vibe, it's worth noting that the brains did not approach neural activity anywhere near consciousness.

The BrainEx solution contained chemicals that prevented neurons from firing. To be extra cautious, the researchers also monitored the brains for any such activity and were prepared to administer an anesthetic should they have seen signs of consciousness.

Even so, the research signals a massive debate to come regarding medical ethics and our definition of death.

Most countries define death, clinically speaking, as the irreversible loss of brain or circulatory function. This definition was already at odds with some folk- and value-centric understandings, but where do we go if it becomes possible to reverse clinical death with artificial perfusion?

"This is wild," Jonathan Moreno, a bioethicist at the University of Pennsylvania, told the New York Times. "If ever there was an issue that merited big public deliberation on the ethics of science and medicine, this is one."

One possible consequence involves organ donations. Some European countries require emergency responders to use a process that preserves organs when they cannot resuscitate a person. They continue to pump blood throughout the body, but use a "thoracic aortic occlusion balloon" to prevent that blood from reaching the brain.

The system is already controversial because it raises concerns about what caused the patient's death. But what happens when brain death becomes readily reversible? Stuart Younger, a bioethicist at Case Western Reserve University, told Nature that if BrainEx were to become widely available, it could shrink the pool of eligible donors.

"There's a potential conflict here between the interests of potential donors — who might not even be donors — and people who are waiting for organs," he said.

It will be a while before such experiments go anywhere near human subjects. A more immediate ethical question relates to how such experiments harm animal subjects.

Ethical review boards evaluate research protocols and can reject any that causes undue pain, suffering, or distress. Since dead animals feel no pain, suffer no trauma, they are typically approved as subjects. But how do such boards make a judgement regarding the suffering of a "cellularly active" brain? The distress of a partially alive brain?

The dilemma is unprecedented.

Setting new boundaries

Another science fiction story that comes to mind when discussing this story is, of course, Frankenstein. As Farahany told National Geographic: "It is definitely has [sic] a good science-fiction element to it, and it is restoring cellular function where we previously thought impossible. But to have Frankenstein, you need some degree of consciousness, some 'there' there. [The researchers] did not recover any form of consciousness in this study, and it is still unclear if we ever could. But we are one step closer to that possibility."

She's right. The researchers undertook their research for the betterment of humanity, and we may one day reap some unimaginable medical benefits from it. The ethical questions, however, remain as unsettling as the stories they remind us of.

Scientists see 'rarest event ever recorded' in search for dark matter

The team caught a glimpse of a process that takes 18,000,000,000,000,000,000,000 years.

Image source: Pixabay
Surprising Science
  • In Italy, a team of scientists is using a highly sophisticated detector to hunt for dark matter.
  • The team observed an ultra-rare particle interaction that reveals the half-life of a xenon-124 atom to be 18 sextillion years.
  • The half-life of a process is how long it takes for half of the radioactive nuclei present in a sample to decay.
Keep reading Show less