Talking Social Media with Lou Kerner

Lou Kerner may be a bit misunderstood.

When I blogged about last week’s profile of him, I did so without comment.  Most people did the digital equivalent of rolling their eyes when they read his unofficial title, Wall Street’s First Social Media Analyst.  This skepticism is understandable – he is talking about a very controversial subject (valuations of venture startups) and most of what he says gets chopped up by the media soundbite machine.

I had an interesting conversation with Lou on Friday.  We talked about his background as a Goldman Sachs analyst during the Web 1.0 days and I got a better sense of what he’s actually trying to accomplish as a Wall Street social media analyst.  It boils down to this: There is money to be made in venture stage companies by covering them based on earnings and revenue potential like a public company analyst.  It may be highly lucrative for Lou’s investors and partners to have a framework with which to assign values to these companies.  We can disagree on the valuations themselves but Lou is coming about his guesses using math, not hype.

For example, here’s Facebook versus Google on Revenues from one of Kerner’s presentations:

Besides, in 2009 he publicly pronounced that Facebook was at least a $100 billion company, opening himself up to every ounce of scorn the media and blogosphere could muster at the time.  Two years later, Facebook is at $85 billion based on the last private stock transaction I believe.

His March 2011 Social Media Overview SlideShare is critical to understanding his views but I will also drop a few of the ideas from our discussion below…

* Kerner is not a bandwagon guy, he began publicly talking about social media in 2003.

* He once pitched Zuckerberg to sell him a stake in Facebook at Harvard way back in the beginning, he was almost successful at closing a round when Facebook was valued at $15 billion.

*That controversial report about Facebook being worth $100 billion was the first piece of company research he had written since the 1990s.

*Kerner is also not a “This time is different” guy.  There is no talk about new paradigms.  He concedes that this time is the same and that many social startups will not exist after the inevitable washout.

*He will not be writing research on the LinkedIns and Groupons when they come public because what he really wants to do is be an investor in these companies as opposed to a traditional analyst.

*He was writing his social media research of his own accord and then a friend of his at Wedbush called him to bring his show over to their stage.

*He differs from the bubble-spotting skeptics on the question of where we are for this innovation cycle.  He points to the mindblowing pace of innovation coming out of Facebook on a daily basis to make this point.  The skeptics believe that this is already 1999 and the end of the social media boom is upon us, Kerner argues that it’s only 1996. It’s early, he says, really early.

*He unabashedly believes that the social media wave will ultimately be the biggest engine of wealth creation in history.  My “c’mon!” didn’t elicit so much as a flinch – he is a true believer.

I find myself in agreement with Kerner on many things.  We both believe that Twitter is going to be way more important and globally ubiquitous than it currently is but as an analyst he concedes that there really is no way to analyze and value the company just yet.   We also agree that there is a tendency for people to hear big numbers ($10 billion!  $50 billion!) and automatically call it a bubble.

My takeaway from the call is that Lou Kerner is looking at this stuff like an analyst and not a promoter, he is talking to more startup and media people on a weekly basis than anyone on The Street and that this could, in fact, be his moment.

Read Also

Wall Street’s View on Social Media (SlideShare)

Wall Street’s First Social Media Analyst (TRB)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. click here commented on Sep 14

    … [Trackback]

    […] Read More Information here on that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  2. Bitcoin Loophole Review commented on Sep 23

    … [Trackback]

    […] Here you will find 1673 more Information to that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  3. bitcoin era review commented on Sep 23

    … [Trackback]

    […] Find More Information here to that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  4. Small child commented on Sep 25

    … [Trackback]

    […] Here you can find 90387 additional Info to that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  5. orangeville real estate agents commented on Oct 16

    … [Trackback]

    […] Read More Info here to that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  6. bmo online business banking commented on Nov 29

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  7. Library commented on Dec 29

    … [Trackback]

    […] Info on that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  8. Study in Uganda commented on Jan 05

    … [Trackback]

    […] Find More here on that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]

  9. Eminent Ewent EW3966 manuals commented on Jan 20

    … [Trackback]

    […] Read More Info here on that Topic: thereformedbroker.com/2011/03/27/talking-social-media-with-lou-kerner/ […]