Valuation of FB's development platforms

In my previous post, I had provided a list of development platforms that Facebook owns. The next thing to do is to do a valuation of these platforms to understand what these are worth and how it can add predictability to Facebook's earnings. To recap these offerings were grouped into the following categories:

1. Platform for Sharing Experiences
2. Platforms that Support Developers
3. Platform that allow advertisers to sell and position advertisements
4. Platform that allows developers to leverage the information being captured by all the interactions on the primary experience sharing platform.

Since the above would be termed as intellectual property, we need to understand how to value these items. Based on a Wikipedia article on valuation of Intellectual Property, the following are the methods one could use to value the above:

1. Cost approach: The cost approach is based on the economic principle of substitution. This principle states that an investor will pay no more for an asset than the cost to obtain, by purchasing or constructing, a substitute asset of equal utility. There are several cost approach valuation methods, the most common being the historical cost, replacement cost, and replication cost.
2. Market approach: The market approach is based on the economic principle of competition and equilibrium. These principles conclude that, in a free and unrestricted market, supply and demand factors will drive the price of an asset at equilibrium point. Furthermore, it provides an indication of the value by comparing the price at which similar property has exchanged between willing buyers and sellers.
3. Income approach: This approach estimates the fair value of intellectual property by discounting the future economic benefits of ownership at an appropriate discount rate.
4. Direct approach: The direct approach is based on the current value of shares of intellectual property in an Intellectual Property (IP) Share Market.
5. Using the pay-off method on top of the four above mentioned methods is a way to enhance the valuation and analysis of intellectual property.

In my future updates on this post, I will try and understand the impact of these platforms on the valuation of Facebook.