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Famous tech acquisitions’ cost per user

public.brightside.io

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Re: Famous tech acquisitions’ cost per user

#91

Post by Shivetya »

oskarth wrote: post #10

Wow. This graph is certainly illuminating: https://public.brightside.io/v1/chart/321ef2c603e8d67080afcd... 450000000 is a lot of users. Metcalfe's law says that the value of a communication network is proportional to the square of the connected users. Then add to this the amazing growth they are seeing. I don't think people quite realize what this means. EDIT: In general, it baffles me how many armchair opinionators…

450 million is a number that immediately brings up the question, how many are real? This is almost as if the site is trying to make up an excuse for the purchase. However to me, having watched different entities out there I am always curious as to what is real and what isn't

Re: Famous tech acquisitions’ cost per user

#92

Post by hankScorpi0 »

Cost per user is moot when compared against companies which inherently have different users, across different types of devices. Take our latest spot of head-scratchery ala WhatsApp, it's easy to do math and say: "oh right they paid about 40$ a user." Did they really?

WhatsApp has a huge set of "new" users on new and old devices. So, how again is a WhatsApp user on some random (non-smart) phone in India, as "valuable" to Facebook as one sitting in the Valley with their iWhatever.

Re: Famous tech acquisitions’ cost per user

#93

Post by ChuckMcM »

simonsarris wrote: post #48

I do not like charts like this because their existence implies that cost per user somehow matters, or is a deciding factor even, in the price of an acquisition. Even if that was the major metric in determining a price, there's often a very large difference between the number of users currently and the expected number 1 year or 5 years out. You don't buy a company because of the number of users it has right now. You b…

Customer acquisition is actually a very big cost. If you're able to compute the lifetime value of having a customer you can easily make an economic argument if the acquisition makes "sense" or not based on that.

I am amazed at how well that particular calculation works some times although I understand the statistics.

Re: Famous tech acquisitions’ cost per user

#94

Post by drakaal »

Several sources estimated that 1/3 of whatsapp users were spam accounts. So the numbers are a bit off. I would also like to see this adjusted for "Today Money" which would put things like Geocities WAY up there.

I quoted a source at $80 per actual users base on the Monthly Uniques.

http://www.forbes.com/sites/shelisrael/2014/02/25/2329/

Re: Famous tech acquisitions’ cost per user

#95

Post by benched »

billspreston wrote: post #66
alexeisadeski3 wrote: post #36

Earlier quoted context omitted.

Oh my god... I'd forgotten completely about YouTube. At under $2B, that must have been one of the best acquisitions of the whole bunch. YouTube for 1/10 the cost of WhatsApp.

Best acquisition? When was the last time you gave Youtube money (or Google money to watch videos)? The fact that their videos are no unwatchable because of quality stutters and the inability to rewind/jump, it's only a matter of time for a new video site to take over.

Are you kidding? After becoming a household brand by trojan tactics (starting with no ads), and then slowly boiling its users until almost every click leads to an ad with delayed skip, and the videos are covered by six layers of distracting banners and useless information?

If our patience is worth any money, Youtube is extracting it in spades now.

Re: Famous tech acquisitions’ cost per user

#97

Post by erichocean »

dredmorbius wrote: post #82
Retric wrote: post #21

Earlier quoted context omitted.

Metcalfe's law is clearly wrong after a network get's overly large. I could in theory call a random person in China but if I have no way of communicating with them it's practically worthless to do so.

See "A Refutation of Metcalfe's Law", by Odlyzko and Tilly: http://www.dtc.umn.edu/~odlyzko/doc/metcalfe.pdf I'd extend the rule further and suggest that the value of a network scales as some Odlyzko and Tilly suggest, but with an additional negative function subtracting value (v) from the network: v = n(log(n) - f(n) That is: as the network grows, the added value of each additional member is reduced (log(n)). Furthe…

> To scale to 1 billion users with net positive value means you have to keep k to less than 0.00000001. That is: any one member can have only a 1 in 10 million chance of being annoying to other members.

Or you could just design a network where new users don't annoy existing users, and reduce it down all the way to zero.

Re: Famous tech acquisitions’ cost per user

#98

Post by dredmorbius »

erichocean wrote: post #97
dredmorbius wrote: post #82

Earlier quoted context omitted.

See "A Refutation of Metcalfe's Law", by Odlyzko and Tilly: http://www.dtc.umn.edu/~odlyzko/doc/metcalfe.pdf I'd extend the rule further and suggest that the value of a network scales as some Odlyzko and Tilly suggest, but with an additional negative function subtracting value (v) from the network: v = n(log(n) - f(n) That is: as the network grows, the added value of each additional member is reduced (log(n)). Furthe…

> To scale to 1 billion users with net positive value means you have to keep k to less than 0.00000001. That is: any one member can have only a 1 in 10 million chance of being annoying to other members. Or you could just design a network where new users don't annoy existing users, and reduce it down all the way to zero.

Or you could just design a network where new users don't annoy existing users

Sure. But that is just one of many possible cost-reducing mechanisms. I've expanded on this idea at more length here: http://www.reddit.com/r/dredmorbius/comments/1yzvh3/refutati...

In the case of cities, physical distribution means that even within a given city, the interactions of its citizens, while potentially very high, are generally reasonably low. It's less my direct contacts (likely within a fair approximation of Dunbar's Number) that are high, than my 2nd and 3rd order possible contacts which are high.

In a small town, those 2nd order connections are inherently constrained to the size of the population: my 300 direct contacts may expand to the 3,000 or 30,000 of a small town, but not the million or more of a large metropolis.

Similarly, for more complex organisms, you also have more complex immune systems. An interesting (and staggering) recent fact I ran across is that the individual cell mortality rate among ocean lifeforms is about 20%. Per day. If you're a cell in the ocean, you've got 1:5 odds of not being here tomorrow, because of the viral load:

http://www.reddit.com/r/dredmorbius/comments/1vyanj/viral_so...

So it is with other complex networks: higher levels of complexity require far more aggressive immune systems.

Re: Famous tech acquisitions’ cost per user

#99

Post by erichocean »

dredmorbius wrote: post #98
erichocean wrote: post #97

Earlier quoted context omitted.

> To scale to 1 billion users with net positive value means you have to keep k to less than 0.00000001. That is: any one member can have only a 1 in 10 million chance of being annoying to other members. Or you could just design a network where new users don't annoy existing users, and reduce it down all the way to zero.

Or you could just design a network where new users don't annoy existing users Sure. But that is just one of many possible cost-reducing mechanisms. I've expanded on this idea at more length here: http://www.reddit.com/r/dredmorbius/comments/1yzvh3/refutati... In the case of cities, physical distribution means that even within a given city, the interactions of its citizens, while potentially very high, are generally r…

Awesome article.

> The value to huge communications networks isn't in making connections but in avoiding making them at all.

The social networking startup I'm at is focused entirely on that problem. It's taken a lot of work to have the scope of possible interactions be the entire network, while at the same time, limiting the interactions to any given user to just those with a positive value.

Since the algorithms are not omniscient, we also have a ruthlessly efficient feedback mechanism whereby users can indicate when they have received a negative value communication with just a single swipe.

There's tons of interesting problems in this space. :)

Re: Famous tech acquisitions’ cost per user

#100

Post by dredmorbius »

erichocean wrote: post #99
dredmorbius wrote: post #98

Earlier quoted context omitted.

Or you could just design a network where new users don't annoy existing users Sure. But that is just one of many possible cost-reducing mechanisms. I've expanded on this idea at more length here: http://www.reddit.com/r/dredmorbius/comments/1yzvh3/refutati... In the case of cities, physical distribution means that even within a given city, the interactions of its citizens, while potentially very high, are generally r…

Awesome article. > The value to huge communications networks isn't in making connections but in avoiding making them at all. The social networking startup I'm at is focused entirely on that problem. It's taken a lot of work to have the scope of possible interactions be the entire network, while at the same time, limiting the interactions to any given user to just those with a positive value. Since the algorithms are…

Thanks.

we also have a ruthlessly efficient feedback mechanism whereby users can indicate when they have received a negative value communication with just a single swipe.

That's helpful, though you've really got to recognize that a huge part of the problem is assessing indirect feedback.

If you've seen Derek "Veritasium" Muller's "The Problem with Facebook" videos, one of the challenges is that interactions with FB content are hard to gauge. Dating sites have a similar challenge, in that feedback on interactions ("how did the date go") are rarely collected. As opposed to YouTube where a huge signal is "did the user stay on the page for the duration of the entire video". If I watch 5 seconds of a 3 minute video (or 30 seconds of a 60 minute vid), odds are I wasn't very impressed.

There's also the challenge of sorting out abuse of moderation systems, particularly those trying to get legitimate (but unpopular) voices banned or restricted.

The good news is that there are some people whose interactions are so widely negative (spammers and trolls) that you can attack them head on and reduce the cost coefficient significantly (recognizing that the cost constant is constructed of both a specific value and the number of connections). Spam is as annoying as it is because a single spammer affects so many other users.

The flipside is that you can increase the network value by finding people others really want to connect with. Here I see G+ as being horribly naive (also YouTube) in repeatedly making recommendations that I'm absolutely not interested in, without offering me an opportunity to say "don't show me this person" or "don't show me this product / video / category" ever, ever again. One of my long-standing challenges to the "deep data" (snooping) perspective is: rather than compile a massive dossier on my and attempt to bother me by way of it, when you do find me in an intentional mood to find something, get really good at figuring out whether you're offering me what I want or not. Why Google should know my location to within 2 feet every 60 seconds of the past five years ... but not be able to tell me the dot pitch of the monitor I'm shopping for, strikes me as a stunningly obtuse mismatch of data focus.

That said: yes, the ability to dismiss stuff I don't want to see and be bothered with is absolutely useful. As I'd repeatedly said at G+: let me say "not now", "not this hour", "not today / this week / month" (essentially: timeouts). And of course "not ever". G+'s blocking feature is also grossly inadequate. Some people, yes, I simply don't want to deal with. For others, I just don't want to see their insipid posts, or deal with their insipid comments on my own posts.

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