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Verizon to Buy AOL for $4.4B

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Re: Verizon to Buy AOL for $4.4B

#231

Post by krrrh »

darklajid wrote: post #206
krrrh wrote: post #204

Earlier quoted context omitted.

The two keys to understanding whatsapp valuation are that they had established ubiquitous cheap all-you-can-whatsapp packages with telecoms in developing markets, which quickly became all-you-can-whatsapp-and-Facebook, and are now being parlayed somewhat clumsily into Internet.org. The second thing is the growth of messaging-as-platform in markets like China, where everyone is using wechat to query bank balances, ord…

I'm confused. I like your context, the explanation of why IM might be a big deal. I don't have that background and might be using IM in a weird/non-mainstream way and certainly don't get global trends. But then you say 'wechat'. Note again: I don't use any of these apps. It seems that this is a competitor? How does "A competitor is really successful" translate to "you guys are doing something valuable"? And if you'd…

I agree with you that the hold of these apps can be surprisingly tenuous, and the history of desktop IM client switching would bear this out.

However, there's also a good argument that mobile messaging was a shift to a new platform (and the inevitable replacement of SMS). There are some fairly resilient network effects, mostly geographically focussed, Whatsapp, iMessage, Wechat. Wechat is just further ahead than the other networks in showing what a messaging platform can develop into, a platform, rather than merely a replacement for SMS. Naturally Wechat has also been sheltered from competition by the great firewall. So Wechat is an indispensable app if you live in China, but in the rest of the world almost no one knows that it exists. You don't only use Wechat to chat with your friends, but also to query your bank balance, pay at McDonalds, and shop online. It's all very weird, because the UX is chat, but if your first computer was a smart phone then it probably feels more natural.

Even though the switching costs between mobile messaging apps seem much lower with mobile and notifications (it's easy to have a dozen installed), it still takes a lot to convince all your contacts to install something new. If these apps become platforms that people get used to using to using to interact with their bank or sirline it beomces harder to unseat..

Consider how just a few mobile apps not being available on blackberry or windows phone makes switching to these minor platforms difficult.

Re: Verizon to Buy AOL for $4.4B

#232

Post by krrrh »

darklajid wrote: post #206
krrrh wrote: post #204

Earlier quoted context omitted.

The two keys to understanding whatsapp valuation are that they had established ubiquitous cheap all-you-can-whatsapp packages with telecoms in developing markets, which quickly became all-you-can-whatsapp-and-Facebook, and are now being parlayed somewhat clumsily into Internet.org. The second thing is the growth of messaging-as-platform in markets like China, where everyone is using wechat to query bank balances, ord…

I'm confused. I like your context, the explanation of why IM might be a big deal. I don't have that background and might be using IM in a weird/non-mainstream way and certainly don't get global trends. But then you say 'wechat'. Note again: I don't use any of these apps. It seems that this is a competitor? How does "A competitor is really successful" translate to "you guys are doing something valuable"? And if you'd…

I agree with you that the hold of these apps can be surprisingly tenuous, and the history of desktop IM client switching would bear this out.

However, there's also a good argument that mobile messaging was a shift to a new platform (and the inevitable replacement of SMS). There are some fairly resilient network effects, mostly geographically focussed, Whatsapp, iMessage, Wechat. Wechat is just further ahead than the other networks in showing what a messaging platform can develop into, a platform, rather than merely a replacement for SMS. Naturally Wechat has also been sheltered from competition by the great firewall. So Wechat is an indispensable app if you live in China, but in the rest of the world almost no one knows that it exists. You don't only use Wechat to chat with your friends, but also to query your bank balance, pay at McDonalds, and shop online. It's all very weird, because the UX is chat, but if your first computer was a smart phone then it probably feels more natural.

Even though the switching costs between mobile messaging apps seem much lower with mobile and notifications (it's easy to have a dozen installed), it still takes a lot to convince all your contacts to install something new. If these apps become platforms that people get used to using to using to interact with their bank or sirline it beomces harder to unseat..

Consider how just a few mobile apps not being available on blackberry or windows phone makes switching to these minor platforms difficult.

Re: Verizon to Buy AOL for $4.4B

#233

Post by hueving »

stevewilhelm wrote: post #127
darklajid wrote: post #58

Today I learned that WhatsApp is 5 times more valuable than AOL - and I never understood either of these companies' market.. Interesting though - that company 'felt' like a giant when I seriously got into using the web and although the article seems to imply that the operations of AOL continue (using the AOL brand?) it's fascinating to see such a company being swallowed.

WhatsApp has about a quarter of a billion (with a 'B') users worldwide.

Trying to emphasize the B in billion when you are just at a fraction of a billion looks pretty stupid. HN gets 1/500th of a billion (with a B) views every day.

Re: Verizon to Buy AOL for $4.4B

#234

Post by XplodingForce »

fgsfdsfgsfds wrote: post #223
Retric wrote: post #221

Earlier quoted context omitted.

IMO, shorter comments much more clearly express ideas. I hate this attitude. It reeks of privilege and naivety of the working world outside the speaker's bubble. But I digress. team got their work done without trying to play "the game" too hard. Almost everyone else in the company would fight them to gain control over a certain aspect of his account then never ever doing any work towards it, forcing my dad's team to…

yeah man who the fuk has time to read two whole PAGES of words this aint social studies LMAO #yolo ☺☺☺☺☺☺☺☺☺☺☺☺ can i get the sparknotes for your middlebrow hacker news dismissal i got SHIT TO DO SON 💩

Overreacting much? His summary of your comment actually got me interested enough to read the whole comment, which I would otherwise have never read (it's not exactly a unique story).

I would like to add some constructive criticism: it seems like you are idealizing your dad in this story (his team was really the only one in this really big company making any money), which is a very normal thing to do, but it is not needed to make your point. Also, you are dehumanizing "corporate people" by calling them psychopaths. They are not (usually) psychopaths, they have feelings and empathy, but are just very good at rationalizing those feelings away. I think it is important to recognize that they are no different from you or me, since that might prevent you from doing the same thing in the future.

Re: Verizon to Buy AOL for $4.4B

#235

Post by tootie »

georgeott wrote: post #77
tootie wrote: post #74

Earlier quoted context omitted.

AOL might be the ultimate company that missed the boat. They practically owned the internet in America in the 90s and just let the whole thing get away. They had pole position to be Google+Facebook at once.

They owned a closed "Walled Garden" version of the internet. Once the open internet took off, AOL was doomed.

Tell that to Apple.

Re: Verizon to Buy AOL for $4.4B

#236

Post by steego »

XplodingForce wrote: post #234
fgsfdsfgsfds wrote: post #223

Earlier quoted context omitted.

yeah man who the fuk has time to read two whole PAGES of words this aint social studies LMAO #yolo ☺☺☺☺☺☺☺☺☺☺☺☺ can i get the sparknotes for your middlebrow hacker news dismissal i got SHIT TO DO SON 💩

Overreacting much? His summary of your comment actually got me interested enough to read the whole comment, which I would otherwise have never read (it's not exactly a unique story). I would like to add some constructive criticism: it seems like you are idealizing your dad in this story (his team was really the only one in this really big company making any money), which is a very normal thing to do, but it is not ne…

> They are not (usually) psychopaths, they have feelings and empathy, but are just very good at rationalizing those feelings away.

I'm really glad you made this point, and I'll add that we have to remember that most people can be induced to make callous decisions with the wrong incentive structures and the right pressures from their management. In some environments, behavior we might deem callous is merely institutional for others for pragmatic reasons.

All too often, we forget that when building institutions (commercial, government, etc.), it's critical we don't inadvertently construct systems that give people incentives to do the wrong thing. We have to stop labeling normal people as psychopaths and remind each other we can all act callously under normal circumstances. Not exceptional circumstances, but normal pressures from management and colleagues.

Dan Ariely wrote a good book that tries to explain some of the mechanics: http://danariely.com/tag/the-honest-truth-about-dishonesty/

Re: Verizon to Buy AOL for $4.4B

#237

Post by tw04 »

pyvpx wrote: post #100
tw04 wrote: post #72

Earlier quoted context omitted.

It's not the least bit bizarre, but it is EXACTLY what people are (or should be) afraid of. The people who own the pipes should NOT own the content, or they will be incentivized to leverage their monopoly on our computer screens to provide unfair advantages to their content. The FCC should have drawn a line in the sand and been done with it before the Comcast deal was allowed to go through (but of course the head of…

if so, then why should the pipes be privatized at all? in that case, the pipes should be built out and maintained at a governmental-level and leased back at a uniform/standardized price to all providers.

I 100% agree. In my ideal world, the government builds fiber to every house and pulls it back to a central POP where private entities compete to provide service over the top. Thus creating REAL competition and removing the barrier to entry. Unfortunately we've got a lot of people with their heads in the sand that think government is the root of all evil... so I'm working with what I've got :)

Re: Verizon to Buy AOL for $4.4B

#238

Post by tsotha »

wpietri wrote: post #226
tsotha wrote: post #219

Earlier quoted context omitted.

I doubt they had any trouble seeing the decline. The question is what should they have done? Competing directly with cable companies in wiring up homes for broadband is a mug's game. This was before it was reasonable to do with fiber and they didn't have anything like Google's freighters full of cash. So they rode it down. That was probably the right thing to do - their dial up business is still there and still profi…

I think getting into essentially new businesses is exactly what companies facing the Innovator's Dilemma should generally do. The ad-driven content properties are an example of that, and they're the reason for the merger.

I think companies should remain focused on their core product. If you find yourself in a buggy whip industry the best thing to do, IMO, is to reduce expenses as much as possible and return as much profit as possible to the shareholders. When it's not worth bothering with any more the company should be dissolved.

As an investor I'm perfectly capable of taking my dividend and investing in other businesses - I'd rather not have the officers of a company in which I've invested my money taking Hail Mary shots to preserve their jobs.

Re: Verizon to Buy AOL for $4.4B

#239

Post by wpietri »

tsotha wrote: post #238
wpietri wrote: post #226

Earlier quoted context omitted.

I think getting into essentially new businesses is exactly what companies facing the Innovator's Dilemma should generally do. The ad-driven content properties are an example of that, and they're the reason for the merger.

I think companies should remain focused on their core product. If you find yourself in a buggy whip industry the best thing to do, IMO, is to reduce expenses as much as possible and return as much profit as possible to the shareholders. When it's not worth bothering with any more the company should be dissolved. As an investor I'm perfectly capable of taking my dividend and investing in other businesses - I'd rather…

I think that only makes sense if you have a completely dead-end product. AOL, for example, had a fair bit of experience in content. They had a lot of strength in networking. They had a zillion users, giving them low marketing costs for new products. They had a strong marketing org and a well-known brand.

Reducing expenses to the minimum would basically value all of that at zero, which I think is rarely the right case. Look at the examples in Innovator's Dilemma, for example. The successful companies kept making technology/market transitions, one after the other.

As an investor you are capable of taking the cash and investing elsewhere. But you are also capable of selling the stock if you really think they have no hope of innovating.

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