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It seemed obvious to me that the IPO was simply to cash in while the going was good, rather than to move on from there.

Of course it was. Everyone who believed otherwise is an idiot. Facebook did not urgently need cash and had no known expansion plans that would require massive amounts of capital right now. It was large enough to take on Google because it is large enough to make the rules.

In my experience, the rules for Internet companies are still that you do an IPO either early in your growth phase, when things are looking good but not guaranteed, to distribute the risk and get the cash you need for your growth - i.e. on the verge of your breakthrough. Or you do it after the breakthrough, to cash out, selling to people who believe your business will still last long enough for them to make a profit on their original investment and/or find another idiot later on who pays even more.

So any company doing an IPO after it has become the #1 in its segment is cashing out. Doesn't mean it's a bad investment, but investors who think they are investing in a Star and not a Cash Cow are very likely kidding themselves. If you have a star on your hands and believe in it, you'd be stupid to cash out. Even if you're bored and want to do something else, keeping it around will give you the capital for the next ten failed startups.

There's no sustainability in social networking, and I imagine the smart money knew that already.

I do think there is sustainability - but exponential growth on a limited resource base simply can't work. Sooner or later, everyone who wants to be on Facebook, is. But you can then keep the user base, the way some European companies have been around for one or two hundred years without much growth. Smart money (i.e. not Wall Street) knows that "growth" is a buzzword outside a certain (short) period of a company's lifecycle. Part of what caused the financial crisis is this fanatical, quasi-religious belief in growth. People needed to grow in markets that didn' have room for growth at the time, so they had to cook the books, invent new financial fake products, everything to shift the same money around in a way that generated pseudo-profits and fake growth.

To become a good sales man,

1. You need be connected.
2. You need to demonstrate http://www.netmba.com/strategy/swot/ of your product/service
3. You need to demonstrate http://www.netmba.com/strategy/pest/ of your product/service

Unlike a MBA, an Engineer is not trained to do these.

To become a good sales man,

1. You need be connected.
2. You need to demonstrate http://www.netmba.com/strategy/swot/ of your product/service
3. You need to demonstrate http://www.netmba.com/strategy/pest/ of your product/service

Unlike a MBA, an Engineer is not trained to do these.

When they're bad they bring productivity down, but the best working conditions in the world won't make mediocre developers brilliant.

They're what Herzberg called a hygiene factor.

Check http://www.netmba.com/marketing/ if you're a newbie.

I suggest programmers to learn management also http://www.netmba.com/

You may want to find out what a MBA Guy knows and does?

I sincerely advice geeks to explore the unknown world.

I think that 1$/song is VERY high considering that there are no physical manufacturing and distribution costs involved

Argh. It is such a common misconception that production cost is the sole determinant of sale price. It's not.

Something is worth what people will pay for it - no more, no less. It doesn't matter what it costs $100 (maybe more because it's biohazardous) to overnight elephant dung, nor does it matter that the costs of owning said elephant are even more enormous. That doesn't mean elephant dung is worth $100 - very few people in their right minds would pay for it. In fact, despite the costs of manufacturing and distributing elephant dung, it's value is, more or less, $0 USD.

Supply and demand determine sale price.

If elephant dung was suddenly discovered to have the unique property of curing the avian flu, you can bet that lots of people would want it then. Using the jargon, there would be high demand for elephant dung. Considering how little of it is available (really, do you know where you can order some right now?) the going rate for elephant dung would be very high. This is because there is little supply to meet the demand with.

Eventually, those with half a brain would realize there's a fortune to be made farming elephant dung. In fact, a lot of people would. The market would be flooded with elephant dung, increasing supply. Because there is no longer a shortage, prices would fall, perhaps driving out those that least efficiently produce elephant dung. Eventually, a stable equilibrium price would be reached.

With music, lots of people want to hear from their favorite bands - high demand. An oligopoly (small handful) of corporations publish said music - low supply. That translates to music, DRM and all, being valued at the whopping price of $1 USD.

http://www.netmba.com/econ/micro/supply-demand/ >Increasing the wages of poor workers increases aggregate demand for goods. Increasing demand means increasing revenues -- your model assumes that a person making $12/hour consumes the same as a person making $6/hour -- very dubious. Assuming that increasing the wages of poor workers increases demand, an unsupported judgement, increasing demand will increase revenue, however, you neglect the fact that revenue means nothing to a business, it's profit they care about, and if the company has to pay more for each worker, they will charge more per good, negating some or all of the benefits of increasing the minimum wage. The only other way to maintain profit levels is to have less workers, and I doubt many would think more unemployment is better than lower wages. >Further, your model implies that all workers are either making minimum wage or some fixed multiple of the minimum wage. Also dubious. My model says no such thing. >Worse, your model equates the labor market of the consuming population with the total labor market available to producers. This is obviously false. In order to consume something, it must be paid for, and in order to pay, the person buying the good must have a job. So it's obvious that the consumer population = total labor market - unemployed. >All raising the minimum wage will do is increase the rate at which money cycles. Pure BS. It increases prices, decreasesd employment, as well as many factors that are difficult to quantify. Economics is not a cut and dry field, and anyone who tries to make it seem that way is a fool. >I yawn at your Econ 101 gallons of milk. Maybe cause it doesn't fit in with your made up economics?

This is probably going to go way over your head, but for all intents and purposes, your understanding of how a price is determined is severly flawed. The price is determined by one thing only -- the intersection of the supply curve and the demand curve. That's it.

In your simple painting example, the supply curve has one item to sell, so the price will be determined exclusively by demand if the sellers minimum price is met.

What you have with Linux is a complete reversal of the curve. For commodity linux, the supply curve is infinitely long at a zero price. Since the demand cannot possibly be infinite, the demand curve must intersect the supply curve at a price of zero. It has nothing whatsoever to do with the buyer's utility function, the quantity they wish to purchase, or the "perceived value" of the software. In fact, every single buyer could bid a million dollars and the price would still be zero.

If you do not understand that, you missed the fundamental theory behind supply and demand.

-Hope

What free market? The government given monopoly in cable and telephone? Where in the US is there anything approaching a free market in broadband

Phat_Tony, you nailed something that other slashdotters need to pick up on. There is no free market for telecom in the US, but do you know why?

Telecom is a highly inelastic demand product. Raise telephone rates $2 and people still have to have their phone. You wanna go without one? Fires, break ins, etc. are a bitch when you can't call 911. Take a basic micro econ class in college and you'll discover that telecom is an extremely interesting target of taxation authorities because of its inelastic demand (if you have a family member in government dealing with taxation, ask them and they'll confirm. Inelastic products are the primary target of taxation efforts).

Lessig is a nice guy, but a useful fool in this case. He suffers from hanging out with too many government officials and seeks to be liked by them all. I guess we all face this decision of "being liked or being right."

For those of you playing along at home, study Iowa Telecom. In the financial world, they're not much more than a penny stock play ([per Boardwatch, their valuation methodology is smoke and mirrors). Yet they were able to get the Iowa Public Utilities Commission to permit a $3.50 per month per subscriber cross-subsidy from their monopoly service to their competitive one. What all this techno-jargon means is that by promising government officials more tax money, they got to break a basic rule of monopolies: thou shalt not steal from the monopoly pot and put the money into the competitive business pot.

A good example of why this is bad is as follows: I've got the monopoly on electrical service in your town. You own a grocery store. I decide groceries are interesting and start my own. Since I don't have a clue, my expenses are higher than yours. So instead of competing, I get the town mayor to allow me to apply a $10.00 per month fee on electrical service as a "grocery subsidy" - meaning all 50,000 people in town get to give me $10 bucks which I give to my grocery business. Now I've got a half million dollars a month being stolen from anybody that has to have electrical service and given to my failing grocery business. Do you want to compete with me? Best of all, if you refuse to subsidize me, I shut your power off. I get to take $10 from the grocery owner each month to crush his business. It's the modern equivalent of Mongols raping the wives and killing the children.

The mayor lets me do this because I let him collect a fee on top of this. This pays for his pet project, the new community swimming pool, which he's convinced will ensure his reelection. Even if I eventually fail, I've ruined your grocery business and poisoned the market sufficiently so that nobody will ever compete with me.

Boys and girls, it's all about power and stealing your money. I got my wakeup call in 1995 dealing with gambling industry elites who were "giving free Internet to little towns." There's never, ever a free lunch. You have no idea the price you're going to pay. Often, your soul is not enough.

If you believe for a second it's about being nice to you and giving you free Internet, you're the biggest sucker out there. Government and big business is a serious sport. Wake up and look at who's putting the money behind the efforts you're idealistically supporting.

there really is something to an MBA.