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The new Yahoo? Facebook should heed the lessons of internet history

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Re: The new Yahoo? Facebook should heed the lessons of internet history

#91

Earlier quoted context omitted.

Actually isn't buying competitors a bad thing from the Anti-Trust point of view? If you own all the social networks and then refuse to let Influencers to share their post stats with their clients because "Facebook is not in the value chain" it really seems like it really becomes a real Anti-Trust issue. If you only own one, you can always claim there is competition.

> Actually isn't buying competitors a bad thing from the Anti-Trust point of view? Anti-trust legislation is scarcely enforced these days. No matter if in the US or Europe.

To be fair, Anti-Trust takes ages to investigate and then go through the courts. But Google just got hit with an Anti-Trust fine of $5 billion.

I'm surprised Facebook hasn't been hit with EU antitrust already. But the EU is already talking about forcing Facebook to split up.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#92
It's easy to predict that companies will fail, because most do in the end. It's very rare for companies to survive for long periods of time. Just look at the fortune 500 over time. It changes, massively, from decade to decade. If anything that trend is accelerating: companies grow faster and disappear faster as well. So, predicting that neither e.g. Google nor Facebook will be around a decade or two from now is not that unimaginable. Maybe they'll find a way to survive. Maybe they won't.

My bet would be Facebook might disappear and Google has more of a chance of diversifying their business enough that they may survive. The reason is that ad driven business models are long term problematic for both but Google at least has alternate revenue streams (e.g. cloud infrastructure revenue, mobile phone revenue, content subscriptions, b2b sales for analytics, development tooling, etc). They have a much more diverse portfolio of products and services than Facebook. And that's discounting the stuff they do under the Alphabet umbrella. Facebook has just ads. Ads on Facebook, Instagram, Whatsapp, ....

The odds are stacked against pure ad driven business models. It's a race to the bottom. There's privacy legislation, browsers are being upgraded to counter tracking, and users are slowly getting a clue about it being kind of scary that big companies know a lot of shit about them. Add to that the stream of negative news about them and you are looking at serious challenges to what is the only business model Facebook ever had: create addictive engagement driven properties and claim as much time of their users as possible on it so they can measure what they do and feed them ads, fake news, sponsored content, and other stuff 24x7.

Facebook needs to diversify their revenue streams and not just their user facing properties. If they fail to do that, they'll peak and eventually decline.

My guess is that the pressure on Mark Zuckerberg to resign will keep on building until he eventually resigns. Then if they fail to change course under a new CEO, they could suffer the exact same fate as Yahoo where shareholders milk the existing business dry and eventually sell whatever remains for scraps. In the case of Yahoo, this only took a decade or so.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#93
post #86

I know of a few people turning off IG and FB due to the volume of ads, when WhatsApp is monetized lots will do the same. Competitors can offer a similar experience to IG, WA and FB with less ads, because the margins are so massive for FB now, and their products are relatively easily replicated. It's VERY easy for user to switch to a competitor compared with other industries. The scale of the network is hard to achiev…

> It's VERY easy for user to switch to a competitor compared with other industries Not FOR WhatsApp it isn't. I don't know of an app that all my family/friends would switch to if WhatsApp decided to put ads on it. Switching chat apps with your entire contacts list is very cumbersome.

Just use telegram? Literally no differences, but even more ease of use.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#94

It's easy to predict that companies will fail, because most do in the end. It's very rare for companies to survive for long periods of time. Just look at the fortune 500 over time. It changes, massively, from decade to decade. If anything that trend is accelerating: companies grow faster and disappear faster as well. So, predicting that neither e.g. Google nor Facebook will be around a decade or two from now is not t…

Facebook should have provided a Gmail alternative a long time ago. I am surprised how narrow minded they are in terms of long term revenue.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#95
> Facebook could end up paying dearly for mediocre employees to stay on (as its share price falls, it has to hand out more in stock-based compensation to keep people).

Does this passage make sense? With a high flying stock, Facebook would be paying more for mediocre employees while the rsu’s vest than if their stock is lower. If Facebook increases rsu’s to even out the employee’s comp, then the net cost to Facebook will be the same at the lower stock price.

Their only risk is if Facebook’s stock starts appreciating again and they are on the hook for more rsu’s at the higher price.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#96

> Facebook could end up paying dearly for mediocre employees to stay on (as its share price falls, it has to hand out more in stock-based compensation to keep people). Does this passage make sense? With a high flying stock, Facebook would be paying more for mediocre employees while the rsu’s vest than if their stock is lower. If Facebook increases rsu’s to even out the employee’s comp, then the net cost to Facebook w…

I think it does, because with many of these companies you're granted X shares vesting over 4 years and if the share price causes you to drop below your total "target comp" they issue you more shares to make up for it, so it's an additional grant out of FBs pocket.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#97
post #75

This seems implausible precisely because it’s the crowded view. But can anyone recall a time that the crowd correctly predicted the ascent of an unpopular product or the descent of a popular one? I’m old enough to remember Yahoo’s rise and fall. There was a time people thought Zuckerberg was a greedy fool for turning down a $1 billion bid from Yahoo. Oh yeah did we forget about that? Yahoo failed because they were ou…

> Yahoo failed because they were out-innovated. They weren’t the only ones. Lots of highly successful search engines got their lunch eaten by Google. Yahoo! failed on email issues, not on search engine issues.

A lot of people went to Yahoo to search pre-Google. I think they were always "powered by Altavista", but they still got a lot of traffic for search.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#98
post #75

This seems implausible precisely because it’s the crowded view. But can anyone recall a time that the crowd correctly predicted the ascent of an unpopular product or the descent of a popular one? I’m old enough to remember Yahoo’s rise and fall. There was a time people thought Zuckerberg was a greedy fool for turning down a $1 billion bid from Yahoo. Oh yeah did we forget about that? Yahoo failed because they were ou…

> Yahoo failed because they were out-innovated. They weren’t the only ones. Lots of highly successful search engines got their lunch eaten by Google. Yahoo! failed on email issues, not on search engine issues.

Google still makes most of its money from search based ads. That pesky part about making a living and so on.

Re: The new Yahoo? Facebook should heed the lessons of internet history

#99
post #86

I know of a few people turning off IG and FB due to the volume of ads, when WhatsApp is monetized lots will do the same. Competitors can offer a similar experience to IG, WA and FB with less ads, because the margins are so massive for FB now, and their products are relatively easily replicated. It's VERY easy for user to switch to a competitor compared with other industries. The scale of the network is hard to achiev…

> It's VERY easy for user to switch to a competitor compared with other industries Not FOR WhatsApp it isn't. I don't know of an app that all my family/friends would switch to if WhatsApp decided to put ads on it. Switching chat apps with your entire contacts list is very cumbersome.

It's a network effect problem, not an app problem. There's no IP or secret sauce, it's just a user migration challenge. It's not easy but it can happen very quickly, it takes a few seconds to download a different app and get setup. There's no vendor lock in from whatsapp.
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