BUSINESS OPINION:The Facebook flotation sent a shiver through Silicon Valley. Since touching an intraday trading peak of €45 on the day they listed, its shares have languished somewhere in the early 30s, having fallen as low as €25.52.

In a supercharged venture-capital-led world where the nominal value of every start-up company is a factor of the nominal value of another start-up, Facebook’s failure to crystalise investor expectations around value has fractured confidence.

For the first time in almost 40 years there has not been a tech company flotation in June, according to Silicon Valley Bank.

Clearly, the whole industry is having to come to terms with the question that if Facebook is not worth €45 per share then what is it worth?

The glib – but not entirely inaccurate answer – is nobody knows, because no one can really know where the value lies in something as unprecedented as Facebook.

But a logical place to attempt answering the question would be to ask how does Facebook value itself. Irish entrepreneurs visiting Silicon Valley last week as part of the Ernst Young Entrepreneur of the Year chief executive retreat were given an insight into this question courtesy of Paul Adams, global head of brand design at Facebook.

Adams, who hails from Sligo, was heavily involved in the research behind Google’s social network Google+ before being poached by Facebook in late 2010. His role is to help large global brands get the most out of Facebook.

“The value of Facebook,” according to Adams “is not the data it has on people. It is that we have connected people . . . allowed people to connect and share content.”

Companies, and presumably anybody else trying to understand Facebook, need to be conscious of four things, according to Adams.

The first is that the web “is being rebuilt around people rather than being built around content . . . every time you visit a site, if you give that site permission, you will bring with you your friends, your interests and your friends’ interests”.

The second is that people now live in networks which fundamentally affect the way they make decisions. Each network is unique “and you are the only person connecting the people in your network”.

Interestingly, a large network – as measured by their number of friends – does not equate to influence. “Most research studies from the past 10 years have found there to be no correlation between the number of connections someone has and how influential they are. Rather it is about perceived credibility of that person,” according to Adams. .

The two other trends that Adams believes are fundamental to understanding Facebook are that the amount of information on the web is growing exponentially and much of it will be accessed from mobile devices. “All this information will be everywhere. Most people have not used the web. They will access it on a mobile device.”

What these trends will play out is of course hard to divine, but Adams has a view and proffers an example by way of illustration: “In future TV will be organised around what your friends are watching.” Rather than figure out what you want to watch from the baffling array of choice available, you will instead be guided by what the people in your network are watching.

It is an easy-to-grasp example and although Adams did not say it, it seems self-evident that Facebook, which is most people’s platform of choice for hosting their network, would be in a very strong position to capitalise on this new world.

How Facebook will turn all this into hard cash is another day’s work and is at the heart of the share-valuation conundrum.

Having tried to put some sort of price on the potential of the company as set out by Adams, Wall Street has now retreated to a more conventional view based on tangible advertising revenues. In this regard all eyes will be on its maiden quarterly results later this month. Given that the advertising model measures Facebook’s main asset as the data it holds on its members, Wall Street now views Facebook in a way diametrically opposed to that of the firm.

The only thing that can be said without fear of contradiction is that either Facebook was not ready for the market or the market was not ready for Facebook.