No one on this thread seems to have read the article - the article is about trust-busting Alphabet, Amazon, Apple, Facebook and Microsoft. As far as I can tell, everyone on here (at the time of my posting this comment) is squabbling over the title, arguing whether oil or data is more valuable, the dubious definition of data, hard vs. soft goods, etc.
The central thesis of the article is that these companies have become large and the barriers to entry which come from this size may be perceived as being against the public good, as in the case of Standard Oil. That is what is meant by, "Data is the new oil," - it has nothing to do with the actual perceived or actual value of oil or data, but rather the idea that while it is impossible to compete with these companies. The Economist goes on to state that it is no proponent of trust-busting because, "size is not a crime," as they put it so therefore we have to regulate the capture of data in different ways.
"Cosmo: There's a war out there, old friend. A world war. And it's not about who's got the most bullets. It's about who controls the information. What we see and hear, how we work, what we think... it's all about the information!
The world isn't run by weapons anymore, or energy, or money. It's run by little ones and zeroes, little bits of data. It's all just electrons."
> many of their services are free (users pay, in effect, by handing over yet more data)
Not just with loss of privacy, they also pay with increased cost of goods and services that are used to pay for the advertisement
> Governments could encourage the emergence of new services by opening up more of their own data vaults or managing crucial parts of the data economy as public infrastructure, as India does with its digital-identity system, Aadhaar
Since we are worried about privacy, let's give government the power to identify and track individuals based on "ten fingerprints and two iris scans" [1]
This article is wrong not because as some point out oil is still more valuable commodity, but because it targets the wrong product. The most valuable resource is knowledge not data. I can sell you trillions of data points from many different devices and sensors, but in itself they are worthless. However, if you can get any insights, any knowledge from these data point the situation will change. It it's not the data that's important but the resulting knowledge.
It's like iron ore (in this case data) - in itself it's pretty much just a rock, but if you can extract the iron (knowledge) the resulting product is much more valuable.
Some companies are waking up to this fact, but the knowledge as a resource is still underutilized..
The value is in extracting meaningful information for decision making using data. Data is the crude. The one who wins is the one who knows how to make it fuel?
I give much higher odds for a crash in the value of data vs the value of oil. Oil has fluctuated tens of percents, but data swings from "valued at hundreds of millions" to "nobody wants to buy it". For a recent example, see closing sale of Yik Yak.
One of the insights about data as a resource is that it is renewable. Every year, there are new 18 year olds joining Facebook volunteering their data (same for other user data mining companies).
An estimate by a respected third party gave its valuation at just $400 billion. [1]
Even with a recent tax reduction to boost its market capitalization, most analysts believe it is not worth more than $1.5 trillion. If you consider a foreseeable future, Google could likely surpass that as its services increase in value while oil is threatened by alternative energy.
Overall, the comparison seems wrong as Saudi Aramco and Google hold different proportions of value in oil/data that exist in the world.
Such a bizarre comparison. Google is not all data, and Saudi Aramco is not all oil. Saudi Aramco also has refining and shipping operations. Finally, Saudi Aramco is privately held by Saudi Arabia, not publicly trade and valued my the market.
The company itself might not be traded on stock exchanges, but the products are. Which means, the moment you own 20% of all the oil on the planet, and 25% of the gas [1] , you can compute the value of the company quite easily.
And this value dwarfs Google and Apple very easily.
I haven't read an s-1 from Saudi Aramco yet, but in 2014 (when oil was still riding high), they did $1.5T in revenue. Given some of the most favorable valuation methods, let's say 5x revenue== $7.5T. however, margins are important. I think a good estimate for Saudi Aramco is 25% for margins== $1.8T/yr. If/when the Saudi people ever figure out that the royal family captures the vast majority of the revenue from the resources of the entire country, I think the 33M Saudi people are going to start rioting in the streets.
I know very little about economics, but it seems very weird to me to compute the value of an oil company based on the current price of oil and the reserves it owns. Not all oil it owns is for sale right now at that price and it is very unlikely that the price for oil will stay the same until all reserves are depleted.
Market value is speculation based on future profits. Sure oil is currently the most energy dense means of portable energy storage in a somewhat affordable manner.
But do keep in mind half of oil goes to fuel cars. Once cars become electric and solar chargers pop up in cities things change considerably.
We only rely on oily and pay absurds amounts of money to Saudi Arabia since we have little choice. Once the alternatives become cheaper, it's better both economically and environmentally to distance away from Saudi oil.
Sure Saudi can make oil cheap as dirt to combat alternatives but then they aren't making as much money. I don't foresee a scenario that in 20 years Saudi oil demand will keep on rising.
Their entire economy is based on natural resources. Not a great place to be.
> Last year, he said he expected the IPO would value Aramco at least $2 trillion. Any valuation would account for both oil price expectations and the size of Saudi Arabia's proven oil reserves.
something physical vs non-physical. The value association to oil is well known and varied, while data's value is still in its infancy.
I still believe the accuracy and trustworthiness of said data would still have to be proven or guaranteed in some fashion in order for it to become considered a true resource with a tangible value attached to it.
Possibly have an associated physicality to it (i.e stocks attached to companies, money attached to physical currency/gold etc..).
Very true. Data about oil is also plagued with the fact that it too cannot be fully trusted to a high degree, unless that data is associated with physical evidence (actual production), which even then cannot be 100% reliable.
The central thesis of the article is that these companies have become large and the barriers to entry which come from this size may be perceived as being against the public good, as in the case of Standard Oil. That is what is meant by, "Data is the new oil," - it has nothing to do with the actual perceived or actual value of oil or data, but rather the idea that while it is impossible to compete with these companies. The Economist goes on to state that it is no proponent of trust-busting because, "size is not a crime," as they put it so therefore we have to regulate the capture of data in different ways.