The Internet Is Dead (As An Investment) • Hacker News Board

Re: The Internet Is Dead (As An Investment)

#11

Post by extension » Sun, Jul 19, 2009, 8:03 AM UTC

eserorg wrote: post #6

To paraphrase Clayton Christensen's "The law of conservation of attractive profits": "When attractive profits disappear at one stage in the value chain because a product becomes modular and commoditized, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage. That is, the location in the value chain where attractive profits can be earned shifts in a predictable w…

Does this still apply if the attractive profits were never there to begin with?

Re: The Internet Is Dead (As An Investment)

#12

Post by psawaya » Sun, Jul 19, 2009, 8:20 AM UTC

fallentimes wrote: post #2

I expected better from the WSJ. Even if what the author says is true, he supports his assertion with blanket statements and anecdotes.

Have to agree with you. If this guy can't do his homework and realize just why AOL and Myspace are sinking ships, then he shouldn't be writing for the WSJ. Comparing all tech companies to those two is, of course, ridiculous.

Re: The Internet Is Dead (As An Investment)

#13

Post by Tichy » Sun, Jul 19, 2009, 9:56 AM UTC

ojbyrne wrote: post #5

I thought that after a bunch of stuff about investing in boring, conservative investments, the last line was hilarious: "Next article: my favorite biotech plays."

Felt the same, like it's the most cliched investment ever.

Re: The Internet Is Dead (As An Investment)

#14

Post by Tichy » Sun, Jul 19, 2009, 9:58 AM UTC

Instead he suggests highway building companies. Several car manufacturers just went broke. I suspect highways are not the hottest thing on the planet anymore.

Re: The Internet Is Dead (As An Investment)

#15

Post by csbartus » Sun, Jul 19, 2009, 12:02 PM UTC

fallentimes wrote: post #2

I expected better from the WSJ. Even if what the author says is true, he supports his assertion with blanket statements and anecdotes.

This is why old media is sinking. It is not just about the old channels but old authors too.

In the same way I was disappointed by O'Reilly articles recently. Now when choosing to read an article I'm not looking the source (WSJ, Techcrunch, ...) but the author. (like Zed :). But foremost at article's HN comments

Old media's only currency is the rating thus they'll have to produce something sensational like this article. New media's currency is community credit and respect so we are producing knowledge

Re: The Internet Is Dead (As An Investment)

#16

Post by eru » Sun, Jul 19, 2009, 3:01 PM UTC

extension wrote: post #11

eserorg wrote: post #6

To paraphrase Clayton Christensen's "The law of conservation of attractive profits": "When attractive profits disappear at one stage in the value chain because a product becomes modular and commoditized, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage. That is, the location in the value chain where attractive profits can be earned shifts in a predictable w…

Does this still apply if the attractive profits were never there to begin with?

Some companies have made a lot of money on the internet.

Re: The Internet Is Dead (As An Investment)

#17

Post by eru » Sun, Jul 19, 2009, 3:03 PM UTC

Tichy wrote: post #14

Instead he suggests highway building companies. Several car manufacturers just went broke. I suspect highways are not the hottest thing on the planet anymore.

If prices reflect this already --- or especially if they have over-reacted, it might a good opportunity to buy anyway.

Re: The Internet Is Dead (As An Investment)

#18

Post by vaksel » Sun, Jul 19, 2009, 3:30 PM UTC

That's just stupid, internet startup costs are peanuts compared to any other market.

The problem, is that investors are used to investing huge amounts. So they end up investing millions into an idea that could have gotten off the ground with a few hundred K.

Re: The Internet Is Dead (As An Investment)

#19

Post by Everest » Sun, Jul 19, 2009, 4:20 PM UTC

Fred's response example of Google Maps really bothered me. I hate when Internet companies say "but if we wanted to make money we could advertise" Google Maps is not a recent product. Why aren't they advertising if its so easy for them to do? Wouldn't it be illogical for them to pass up revenue? the answer is that Google worries sticking ads throughout Google Maps may diminish the user experience -- which is why they can't decide to monetize on a whim.

I would expect VCs hear pitches all the time where entrepreneurs say that they haven't tried monetizing but easily can. And I imagine most of the time those pitches go in the garbage. So its interesting that Fred uses Google Maps as an example of how Internet companies can make money.

Re: The Internet Is Dead (As An Investment)

#20

Post by extension » Mon, Jul 20, 2009, 4:34 AM UTC

eru wrote: post #16

extension wrote: post #11

Earlier quoted context omitted.

Does this still apply if the attractive profits were never there to begin with?

Some companies have made a lot of money on the internet.

A small handful have made a fortune by monopolizing key markets but web sites in general are not profitable and profit never seems to be much of a concern for those investing in the internet.