I would like to see a map showing where all this money is going by office location, coded for number of employees, as one thing that does seem odd for many of us outside a few very select areas is that we are hearing about this mega-splooge of massive quantities of cash, but very little of it seems to be filtering through to the wider economy. As far as I can tell it is being spent in very concentrated regions on relatively small amounts of people, largely on businesses that are trying to target the pockets of a rapidly shrinking middle class, which doesn't particularly bode well.
Last Time It Was This Crazy, the Stock Market Crashed
41–50 of 78 posts
Re: Last Time It Was This Crazy, the Stock Market Crashed
#42What's often missing in these discussions is that a lot of the value of the companies is based on the threat they present to actual profitable companies, like Google and Facebook, and has nothing to do with whatever revenue they currently have. The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook. Similarly for Instagram and SnapChat. Uber will in the long run to…
Maybe this is the right place to ask something that really confuses me: Why hasn't anyone really challenged Google at their core business (Adsense/Adwords)?
For all the menacing Whatsapp can pose to FB, advertisement is a much larger market, with a clear path to profitability. The problem is not simple, but not outlandish either.
Yet, candidates such as Bing and, at one time, Yahoo, continuously fail to properly serve this market.
Re: Last Time It Was This Crazy, the Stock Market Crashed
#43Just a thought, but before that crash, I wasn't actually using ANY of the websites that were valued so high. And I think not a lot of people really were?
I read about the big investments back then, but to me, they never became more than a headline. Never a place to visit. More like "a place that I should visit, sometime in the future". It was full of promise, not of value.
Though now, I use and actually pay for many services. I feel like they add a certain value that, back then, nothing did.
Now, a billion dollar is a lot. But A billion people is too.
Re: Last Time It Was This Crazy, the Stock Market Crashed
#44"A parabolic rise in start ups with valuations of $1 Billion or More" or "A linear rise in startup valuations on a logrithmic scale". Amazing what happens in 10 years when worldwide smartphones go from a tens of millions a year (2004) to over a billion a year (2014). Apple has 130 billion in cash sitting overseas with nothing to spend it on. Microsoft has 90 billion. Google has at least 30 billion. Facebook has over…
You are citing existing old ultra-successful companies, the best of the best, to justify the high valuation of startups now. That isn't much of an argument. > My rule of thumb is that if you can get 100,000,000 users you can sell for $1,000,000,000. Lots of users does equal success because you only have to monetize them at low numbers. But the number of 100M user companies is still very few. > Hell did even Google ha…
I don't think it was a comparison of quality, just an observation of spending clout. Things are being bought at billion dollar valuations that would have failed, just because the top players don't want to even think of risking their dominance, and that isn't going to stop unless they run out of money. This means that some of the easiest exits available are in making things like snapchat, where you will get bought just because you have users communicating over it.
Re: Last Time It Was This Crazy, the Stock Market Crashed
#45I've recently sold all my long term shareholdings on a similar gut feeling. I wonder what will be the trigger that sets off the selling frenzy this time round?
Looking back we'll find it was this very comment of yours. How do you feel about that ;)
Re: Last Time It Was This Crazy, the Stock Market Crashed
#46What's often missing in these discussions is that a lot of the value of the companies is based on the threat they present to actual profitable companies, like Google and Facebook, and has nothing to do with whatever revenue they currently have. The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook. Similarly for Instagram and SnapChat. Uber will in the long run to…
> The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook. I know it's anecdotal, but the thing that makes WhatsApp so great for me it's that "it just works". I have it installed on my iPhone 4, and compared to Facebook's app is hundreds of miles ahead. Until 6-months or so ago the FB app needed 2-3 or minutes to actually open and redirect me to the private messages…
It sounds like your issue was a slow phone. Facebook's Messenger app works great for me. I also use Whatsapp daily but prefer the Facebook app. It's a much nicer experience.
Re: Last Time It Was This Crazy, the Stock Market Crashed
#47Earlier quoted context omitted.
You are citing existing old ultra-successful companies, the best of the best, to justify the high valuation of startups now. That isn't much of an argument. > My rule of thumb is that if you can get 100,000,000 users you can sell for $1,000,000,000. Lots of users does equal success because you only have to monetize them at low numbers. But the number of 100M user companies is still very few. > Hell did even Google ha…
I don't think it was a comparison of quality, just an observation of spending clout. Things are being bought at billion dollar valuations that would have failed, just because the top players don't want to even think of risking their dominance, and that isn't going to stop unless they run out of money. This means that some of the easiest exits available are in making things like snapchat, where you will get bought jus…
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Re: Last Time It Was This Crazy, the Stock Market Crashed
#48Earlier quoted context omitted.
Advertising revenue is not stable! I'm alarmed that nobody is talking about this. I used to run an abandonware game site when I was in high school during the first dot com bubble, and we would get paid $100-300 per month from advertisements on the site, which paid for us to run it. After the dot com bubble crashed, we were getting paid $20-30 for the same ads and more traffic. It forced us to take the site down, as w…
Very interesting. I think that a lot of these companies are dependent on advertizing revenue, but so is both Facebook and Google. I guess one has to see which companies are dependent upon advertizing from start-ups rather than established companies to figure out who is most vulnerable in a downturn -- although you said that overall ad rates decreased during the last correction across the board. I wonder to what degre…
It will be different this time. Last time it felt like the whole internet thing was just a fad, so advertisers went back to their normal channels. But this time they have metrics and probably find that no other advertising channel can compete against online advertising as far as ROI is concerned (well, for many companies).
Re: Last Time It Was This Crazy, the Stock Market Crashed
#49What's often missing in these discussions is that a lot of the value of the companies is based on the threat they present to actual profitable companies, like Google and Facebook, and has nothing to do with whatever revenue they currently have. The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook. Similarly for Instagram and SnapChat. Uber will in the long run to…
I disagree with your premises as well as your argument. WhatsApp, Instagram, and SnapChat are valuable because they have users. There are a million ways to monetize users once you have them, but it's hard to get them. Google, Facebook, and others are large, humming machines that squeeze money out of users, but WhatsApp, Instagram, and SnapChat are not. The latter three companies are valuable because they can be fed i…
How in the world would Uber threaten the United States Postal Service or Deutsche Post?
Even if that's a typo and you meant United Parcel Service (UPS), even if we examine DHL independent of its parent company, they are heavily invested in international freight and supply chain management. I see no great benefits there from the ability to summon a cargo plane on a whim with your phone, nor from handing it off to someone with no formal training/license/qualifications.
Re: Last Time It Was This Crazy, the Stock Market Crashed
#50Earlier quoted context omitted.
You are citing existing old ultra-successful companies, the best of the best, to justify the high valuation of startups now. That isn't much of an argument. > My rule of thumb is that if you can get 100,000,000 users you can sell for $1,000,000,000. Lots of users does equal success because you only have to monetize them at low numbers. But the number of 100M user companies is still very few. > Hell did even Google ha…
I don't think it was a comparison of quality, just an observation of spending clout. Things are being bought at billion dollar valuations that would have failed, just because the top players don't want to even think of risking their dominance, and that isn't going to stop unless they run out of money. This means that some of the easiest exits available are in making things like snapchat, where you will get bought jus…
Which is still a big risk: at some point, the market can crash simply because the dominant players get low on cash to keep making acquisitions like that. Suddenly all the assumptions and valuations people are relying on turn out not match up to reality, and everyone stops investing while they take a long hard look at their books.