Today’s correction isn’t much like the dot-com bubble • Hacker News Board

Re: Today’s correction isn’t much like the dot-com bubble

#151

Post by Retric » Mon, Oct 21, 2019, 2:07 PM UTC

chii wrote: post #150

Retric wrote: post #126

Earlier quoted context omitted.

Estimates for YouTube are on the order if $15-25 billion in annual revenue and a ~50% profit margin. With very solid revenue growth. The data is clearly worth real money, but I doubt the data alone is worth 5+ Billion on it’s own. PS: People are watching on the order of 1 Billion hours per day of video so IMO those revenue numbers may be low as that’s 1$ of revenue per ~15 hours of video watched.

youtube's revenue remains undisclosed in google's financial statements (see https://www.nytimes.com/2019/07/24/technology/youtube-financ... ). The $15-25 billion is merely a guess. The fact that google chose not to reveal youtube's financials is stark evidence that it's financials aren't great (otherwise, disclosing it should lead to better stock prices for google!).

Google does include YouTube’s financials, they just bundle them with other things. Having a separate line for YouTube has zero impact on the company’s overall financial situation and thus likely has ~zero impact on it’s stock price.

I suspect if anything they don’t want to break out the financials because it would invite more competition. That or YouTube is tied so closely to the rest of the company it’s hard to separate the numbers.

Re: Today’s correction isn’t much like the dot-com bubble

#152

Post by daxfohl » Mon, Oct 21, 2019, 10:04 PM UTC

wbronitsky wrote: post #129

daxfohl wrote: post #88

Earlier quoted context omitted.

Sorry for all the buzzwords....It was 6 AM PST and coffee hadn't kicked in yet. Interestingly the de-buzzwording of the argument makes sense for the actual thing called "gig economy" too. It could just as well be called the "human rental business".

Hey it happens, no value judgements really; I do it myself all the time. The problem lies in my misunderstanding more than anything else. “Human rental business” absolutely makes whatever economy that is sound much more like the reality these workers live in. We should use it more instead of the euphemisms we all use now.

In fact it highlights the difference too. Cloud services companies own the hardware they rent. Human rental services are pass-thru accounts. Cloud services are more financially successful.

A similar thing happened with eBay and Amazon: Amazon owned the products they sold (initially anyway) and eBay was pass-thru. Amazon was more successful.

So Bezos is currently thinking, how can we own some Amazon humans and provide them for rent?

Re: Today’s correction isn’t much like the dot-com bubble

#153

Post by webninja » Mon, Oct 21, 2019, 10:44 PM UTC

jeremydeanlakey wrote: post #48

One perspective that I gained much later than I should have: Suppose you have a small software company, Reinvest Software with big margins and lots of opportunities to expand. You can take home that profit and pay taxes. Or you can invest in growth. That investment in growth is an investment in intangible assets with insanely good tax treatment. But it looks bad on the financial statements. Suppose an investor, Smart…

What balance sheet item shows this reinvestment that Negative Margin Software Company doesn’t have?

Re: Today’s correction isn’t much like the dot-com bubble

#154

Post by hammock » Mon, Oct 21, 2019, 11:26 PM UTC

hammock wrote: post #109

code4tee wrote: post #44

There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…

> if I sell $2 for $1 that’s a false market You're assuming that there is some objective value of a dollar, and that all dollars are worth that same. These assumptions are not necessarily true. Rather, they are myths that are propping up the current system.

Can't believe I got downvoted for this. Would be worth a whole blog post. Start with the fact that only approved banks have access to the "cheap money" that the Fed loans or are targets of the Fed's open market operations.

Or, start with the phrase "bad money chases out good."

Re: Today’s correction isn’t much like the dot-com bubble

#155

Post by fgonzag » Tue, Oct 22, 2019, 12:07 AM UTC

rubicon33 wrote: post #66

code4tee wrote: post #44

There’s another often unwritten element here around companies basing their valuation on false markets. For example, if I sell $2 for $1 that’s a false market. Of course I can grow like crazy and gobble up lots of customers. I could even “disrupt” existing players like those stodgy old companies (banks) that sell $2 for $2.15 (a loan). The VC subsidies for some of these companies are so high that they are basically se…

That's not an uncommon nor unheard of tactic in business. Fuel growth, and capture the market for your brand, by selling at a loss. The trick is always the transition to profitability. Generally, this comes through layoffs and maybe price increases.

That's the thing about these non tech companies though. They have fixed costs per transaction, something pure tech companies don't. So tech companies can grow at a loss because their marginal cost for each customer is zero or close to zero. As long as you are selling more, you are getting closer to profitability.

This does not apply to all these "unicorns" that have a non negligible marginal cost on their services.

Re: Today’s correction isn’t much like the dot-com bubble

#156

Post by jjeaff » Tue, Oct 29, 2019, 11:23 PM UTC

bydl0coder wrote: post #146

jjeaff wrote: post #92

Earlier quoted context omitted.

I agree, fresh juice on demand is a good idea (besides the fact that the amount of sugar is usually terrible for you). But they had to have found out very early on with Juicero that squeezing the packets by hand basically produced as much juice as their expensive machine.

Well, even if you can do something by hand, there's a market for a gadget that will do it more conveniently. There is a market for food processors and rice cookers. I don't think Juicero is a good example of "stupid money" craze. Theranos is.

Were that the case. But squeezing the juice out of the packet was far easier and quicker than putting it in the machine letting it get scanned, phone home, and then slowly squeeze the bag.