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Social Media Bubble Pops Before It Fully Inflates
bdking writes "Groupon's IPO plans are melting down. Facebook has pushed back its IPO to next September. And now Zynga reports a 95% reduction in sequential quarterly profits. So much for the social media IPO bubble."
At least everyone is getting let down before a lot of people lose a lot of money this time around.
Even Slashdot isn't getting any replies
Really? What next, Slashdot = Search Engine?
They make facebook "games".
I am trolling
Was kind of funny seeing Zukerberg feeling the heat on his ass last week. Too bad he will have to accept to be just another rich man now unless some unlikely hit comes....
I was rather looking forward to shorting them.
I heard Farnsworth say "GOOD NEWS EVERYONE!" before reading this article.
Nothing makes a good headline like massive amount of "revenues" or "profit" decreases - except both metrics can be totally worthless unless you look into details.
YAY!
People who were trying to attach a value to social interaction were idiots to begin with. There's a fine line between marketing things that people are interested in and shoving ads down their throat. The problem with social networking is that you can't piss off your target audience as much with obnoxious ads. Marketers for some reason thing the more obnoxious your ads are the more people see them.
People are have gotten tired of those stupid games.
Facebook is making money and a lot of it.
Groupon. I used it once of movie tickets. People can only go out to eat and got to the spa so many times.
I don't think it is too much of a bubble. Much like the first time around the good will survive the stupid will die off.
Of course you should come to my new social media site. It is for people that are in deep emotional relationships or want to seek relationships with one eyed Episcopalian kangaroos. I am pretty sure it will be the next big thing.
Fetish courtesy of Neal Simon's Goodbye Girl.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Groupon is not a social media website by most definitions of that term. Zynga is a single one of many companies profiting from Facebook. Pushing back the Facebook IPO is not a reason to think that the bubble is bursting- indeed if they thought that they'd want to go and do the IPO sooner rather than later. The Zynga and Facebook issues are also probably to some extent due to a new player entering the field in terms of Google+. It does seem that the social media sites don't remain on top for very long. Myspace is dying, and who even remembers Friendster? But it does seem that the industry itself is here to stay. We may end up seeing something similar to what happened with search engines- successive stages of different companies until someone got the product well enough to dominate the market (a long with a healthy dose of early mover effect compared to new rivals). Whether that will happen or not is hard to tell. But declaring that there was a bubble in this context when most of the relevant companies aren't even being traded actively is really difficult. Declaring that the bubble has burst makes even less sense.
Even the most computer illiterate among my friends and family are starting to talk about privacy invasion, enforced sharing, and lack of control over their personal information. Facebook's "ticker" has created a new world of raging confusion. The anti-social networking mentality is hitting the mainstream..
Better would be "Predicted social media bubble fails to materialize". A bubble is defined by its inflation; a bubble that "pops" before it "inflates" never existed in the first place.
The market and the investors have evolved, almost a defense mechanism, against shitty companies and IPOs. This is nothing more than a population of educated investors.
I want to delete my account but Slashdot doesn't allow it.
Damn. I thought that Zynga's bubble was going to pop, but not this soon. There are only so many Farmville type games anyone can play, and I can't be arsed to build my life around clicking some field every 4 hours without getting paid.
Yes, this is just a year-over-year quarter comparison, and there are a few things that were playing against Zynga in the last few quarters. Not the least of all that a lot of real game companies are getting into the FB game business. Zynga won't be able to just rip-off some game mechanics and then throw some eye candy on top of it. They'll actually have to develop real games.
Welcome to the real world, Zynga. No one except your founders is going to make bank on your stock.
Those who can, do. Those who can't, sue.
Uh.. the whole economy crashing thing was years ago now. I doubt this is related. It does sound more like people just finally got bored and moved on to something else. I'm not sure what, but I'm glad there won't be so many of those stupid predictions about how gaming inside your web browser is "teh futurez!". It has its place, but that place isn't replacing consoles any more than the Wii's motion controls got rid of game pads.
There's a big difference between "infinitescimal growth" and "95% decrease" btw.
which is totally what she said
I must be jaded.
I must have been around a bit.
I must be a thinking human.
It surprises me in the least.
The barriers to entry in these fields are so low I can't figure these absurd valuations of social media - people on the internet are not just fickle, they're extreme fickle - since there's nothing really to hold them anywhere, not much of a stake.
Now eBay, they're still successful no matter how badly they handle their business, because everyone goes there because everyone is there and no other auction sites have really stuck around to compete with them. But social, who's really nailing their cart to any Social Media horse? Google+ pops up and everyone creates an account, just in case everyone else goes there.
We knew this phenomena back in the days of Fido BBSes (and even before that with message systems on college mainframes in the 1970's.)
A feeling of having made the same mistake before: Deja Foobar
They make facebook "games".
I.e. Farmville.
A feeling of having made the same mistake before: Deja Foobar
They'll get out of this without LEARNING something.
And are way more likely to repeat the mistakes. Again.
I'd blame it entirely on the bubble, and irrational valuation. It's not the recession's fault that Groupon's value to decreased from a trillion+ dollars... it was never worth that to begin with, and wouldn't have been even in a healthy economy. Nothing real about Groupon or Zynga has changed that caused their value to decrease 90%; those sorts of swings are entirely driven by the worst type of speculation.
Whenever I see a new Zynga games advertised I immediately hear a twisted version of Boomhauer in my head:
Yeah man, I tell ya what, man, that dang ol’ Zynga, man, you just go in on there and point and click, talk about w-w-dot-w-com, mean you got the chicks on there, man, just go click, click, click, click, click, it’s dang ol' easy, man.
You say things that offend me and I can deal with it. Can you?
Nothing real about Groupon or Zynga has changed that caused their value to decrease 90%; those sorts of swings are entirely driven by the worst type of speculation.
I doubt that speculation reduced Zynga's profits by 95%. Either their costs have soared for some reason, their revenues plummeted or their books were just plain wrong. Or a bit of two or more of those.
To summarise the summary of the summary: people are a problem. ~ h2g2
I wonder if online pet food stores are coming back.
Lets get ahead of the curve. Last tech bubble resulted in all kinds of jokes. This tech bubble is going to result in jokes about... Or will it be more complaining, like this bubble will be nothing but whining about how facebook sucks, etc?
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
The money for the last New Economy bubble was created to counter measure a previous bubble collapse. The fed reduced the interest rates to pump more dollars into the market. That worked perfectly. And the money had to go somewhere. And that somewhere was the New Economy. This time they burned the money in that finance crisis and housing thing. And reduced the interest rates again. However, this time the economy is in such a bad shape due to the financial crisis and the money problems in the Euro-zone and of course the trouble with the US budget keep the banks from "investing" so IPO for the web 2.0 companies is not such a good idea at the moment.
Yes! Finally! Hopefully all this social media crap will die off soon. And my later prediction was correct, Groupon was the first to go.
"When information is power, privacy is freedom" - Jah-Wren Ryel
From what I've read, Zynga's revenues rose 115%, but profits dropped 90%+.
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/09/zyngas-90-drop-in-second-quarter-profits-unlikely-to-derail-ipo.html
According to that article, their costs went up a ton due to development of two new games that have yet to make them money. I have a hard time swallowing the article's claim that a 90% drop in profits isn't something to be alarmed about.
If you can't convince them, convict them.
Sucks to be you. Assholes! You deserve to fail. If I ever see a former Zynga coder or QA person come through my door looking for a job I WILL have you thrown off the premises bodily. Yours All the people you have ripped off, falsely accused of cheating with no proof and otherwise slandered.
Nothing real about Groupon or Zynga has changed that caused their value to decrease 90%; those sorts of swings are entirely driven by the worst type of speculation.
I doubt that speculation reduced Zynga's profits by 95%. Either their costs have soared for some reason, their revenues plummeted or their books were just plain wrong. Or a bit of two or more of those.
I think early speculation on a Google buy out of Groupon propelled their valuation to irrational heights. Reality has been reasserting itself, in a way very reminiscent of Terry Pratchett's Mort, upon Groupon. I thought they had a marginal idea, at best, when I first hear their business model, but I'm just a nobody who said people should be buying Ford stock with every dollar they can lay their hands on, when it was at 89 cents a share in early 2009 (even at today's price of ~$10 a share that's a pretty nifty return.)
A feeling of having made the same mistake before: Deja Foobar
Unremarkable:
1) GroupOn is crap, was going to fail away.
2) We're at the start of a "double-dip" recession or worse; everyone at the Fed is screaming about "no investment;" interest rates have been lowered etc but experts say this will move only a few investors, in highly secure investments... ie, "what Bubble???", no one's taking high-risk investments.
I guess now that Taco's gone, article quality is going even *further* downhill.
If profits are dropping because they're expanding that's a good thing, assuming you think there's space for them to expand in to. I'd want to kick the tires and make sure that money was actually spent on stuff (new offices, larger workforce, whatever), but if their revenue's growing and the profits are down because they're making more stuff, that's not a problem.
I am trolling
So the fact that Groupon counted the total amount of its daily-deal sales as revenue, including fees paid to merchants and didn't think anyone would notice had anything to do with it?
Or how about Zynga's founder Mark Pincus' own admission that he scammed the players to make money.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
I think of them more as slot machines for the internet age.
I am a free slashdotter. I will not be modded, blogged, DRM'd, patented, podcasted or RFID'd. My life is my own.
According to that article, their costs went up a ton due to development of two new games that have yet to make them money. I have a hard time swallowing the article's claim that a 90% drop in profits isn't something to be alarmed about.
Sad but true. Short-sighted investors that are alarmed when executives put profits back into the company instead of dolling them out as dividends are what make so many CEOs drive perfectly good companies into the ground. They should all have their man-cards revoked and sent to business school.
But this time, it was the VC's, private equity, and angels who are holding the declining valuations, not the post-IPO institutional and retail investors.
About time they stop tossing hot potatoes to us -- they finally got burned!
Be very, very careful what you put into that head, because you will never, ever get it out. -Thomas Cardinal Wolsey
Yeah, I was just a nobody then too. I, however, was recommending GM back in 2008. Luckily no one trusted me to give financial information, including my wife.
Well.. maybe. Or Maybe not. But Definitely not sort of.
The definition of "social media" varies but generally speaking the word implies online service that is centered around the social relations between the users. Social media builds on who you're interested in, not on what you're interested in. It's based more on the amount of communication as opposed to the content of communication.
For example, Slashdot isn't social media because I come here for the content (articles and the information and opinions found in comments section). Facebook is social media because I go there to see what people I'm interested in are up to - the content of our status updates and comments hold no value at all but rather the fact that we communicate and the metadata of the communication (tones, etc.) are what matters. Some services (Messageboards, IRC, etc.) CAN be used for communication that contains useful information and they CAN be used just for building and maintaining social relations. Generally, a service isn't labeled "social media" unless it is in some ways been clearly designed for that purpose (FB is clearly built for that purpose, IRC can be used in somewhat similar ways but hasn't been specifically designed around that).
Groupon does have some aspects that could technically be called "social" but they're not what the word meand in "social media".
If profits are dropping because they're expanding that's a good thing, assuming you think there's space for them to expand in to.
A lot rides on whether they predicted it. A company that says "we're embarking on three big projects over the next year, costs are expected to rise initially with effects on revenues following in future years" (um, a bit more detailed than that but you get the gist) looks like a company with a plan and hopefully anybody who doesn't like the plan has already sold well before the results show something like what they forecast. A company that says "oh, uh, yeah our costs have gone up a lot due to some projects we're working on" without having forecast that is scary even if the projects are good ones. Don't know which side Zynga falls closer to.
To summarise the summary of the summary: people are a problem. ~ h2g2
They also make a bunch of iPhone game apps. They have a few word games I play on occasion.
Uh.. the whole economy crashing thing was years ago now.
Uh, haven't you read the papers lately? Crashing repeatedly is apparently all it's capable of these days.
"Recession coming again."
"Really? I didn't even get to see the last one end. @#$"
"Tongue tied and twisted, just an Earth bound misfit
Yeah.. I haven't actually noticed any change at all in my own life.. though I don't make much use of credit, and the only debt I'm in right now is my student loan, so I guess I'm not in a position for it to affect me much.
I think a lot of the whining is just a self fulfilling prophecy though. How do you expect to "increase consumer confidence" when you do nothing but spout doom and gloom all over the place? Sensationalist media really don't help when it comes to this kind of situation.
which is totally what she said
Not sure if you are trolling or what, by Zynga is a huge gaming company mostly propped up by facebook. Some sources say that they are bigger than EA.
Well i guess not anymore :P
As a potential lottery winner, I totally support tax cuts for the wealthy
PS no, I never read the papers, nor do I watch TV or listen to the radio. I used to just never read any news ever (I really don't want to think about rape and murder every single day of my life), but I found that Slashdot often has stuff that interests me.
which is totally what she said
Facebook is - or soon will be - flailing at the wind. Fighting an opponent they can't hurt.
Facebook is now facing a competitor that can afford to earn $ 0 from social media.
Facebook's survival depends on the popularity and eyeball count of Facebook to sell ads and revenue share (Zynga) agreements against.
Google, currently earning as much profit per month as Facebook earns per year, does not need Google+ to earn three cents in order to continue flourishing. While they would LIKE Google+ to be a runaway hit, it simply isn't necessary.
Once Google starts aggressively advertising Google+ on television, stealing 10, 20, maybe 30% of Facebooks' traffic, how will Zuckerburg feel then? Probably like the guys at Netscape after Microsoft purchased Mosaic, rebranded it as Internet Explorer and started giving it away for free.
Facebook's UI is a mess, it's privacy and security settings are not intuitive and the entire user experience feels stale and worn-out to many people I've talked with. The massive redesign that Facebook is preparing to launch, with Timeline and other UI tweaks.. while satisfying some, will probably feel like "work" to many - something new to learn, for what was supposed to be a simple, fun way to keep in touch with friends.
If Google has half a brain, they will ascertain the date of Facebooks' relaunch and start a massive national ad buy for Google+ starting two days prior and run a solid week after. Clean, simple, secure microblogging with video and photo photo sharing. They will steal millions of users.
THIS SPACE INTENTIONALLY LEFT BLANK.
1) GroupOn is crap, was going to fail away.
AdDing random capiTal letters inTo comPany names doesn't make you sound aNy more knowledgeAble about them.
Except that their revenues are actually UP. They bought a lot of stuff and hired a lot of people. Profit money taken in, it's money AFTER you paid for everything they are doing. So, as of now, they are quite sustainable.
Is there anything better than clicking through Microsoft ads on Slashdot?
Not just Facebook. I have been using Words with Friends (Scrabble clone) on my iPhone and it's worked well.. Free. They nag to upgrade to the paid version once in a while, but I don't notice the ads in the free version.
Short-sighted investors
There is another angle though. Wall Street writes its own news, and they sound alarms intentionally. They then bank on the recovery to every involuntary reaction by the market. Just another way the real players cheat to make big money. Most day traders and independent financial advisers and everyone that takes cable news seriously are all being played. You have to be in the club to make money. They may be watching the same news, but I guarantee they hear it differently.
And they don't care who knows about any of this either, because all anyone can do is save yourself anyway, and the victim pool only keeps growing and growing.
The triple A ratings on mortgage backed derivatives was no accident. They rode the bubble, they rode the burst, and they got bailed out, aka financial innovation in the USA.
This is all virtual land in cyberspace. Value it as you dare. Both the MySpace debacle and the Dot Com Boom/Bust are still near enough in most people's memories (and investment portfolios) to sing the song, "Won't be fooled again."
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
At least maybe Mark Zuckerberg won't be such an arrogant asshat a year from now.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
To be fair, I haven't heard about them either.
Then again, I'm not paying money for games I can have on any flashgame page for free...
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Why're you saying that like it's a thing of the past? If anything deserved the continuous aspect ever, this is it.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
The main problem with Groupon is the "deals" suck so badly for businesses that once they've burned through all good will in a region the only way to keep generating revenue is to expand into another.
I would actually be embarrassed to use a GroupOn coupon, knowing how much it was shafting the business in the process. They get what -- 25% -- of their normal price, while GroupOn keeps another 25% for themselves in the half-off price? I truly feel sorry for the businesses who have been convinced to go this route.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
And where's the difference to the recession? It's not really a recession, it's just people waking up and noticing that the toilet papers traded at Wall Street ain't worth remotely what they thought they were.
If anything, we had an artificial market inflation before.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Yes, but that sensationalist media has been the norm for decades and decades on Wall st and in financial markets. The markets have gone through their normal business cycles in spite of that. Recently, the part of the cycle that goes out of recession into recovery has been absent.
Recession doesn't mean that every individual feels the pain. I'm like you in that I don't feel any real trouble from the current economic conditions yet, but I'm not foolish enough to think its all rosy and the economy is just peachy.
that's because the articles author (http://latimesblogs.latimes.com/technology/2008/04/alex-phams-bio.html) covers consumer electronics and video games. She may be a "business reporter", but I wouldn't trust her on an investment decision that reeks of this much risk.
No kidding...all this sensationalist stuff will be the end of us all.
An important change for education.
The social media bubble has not burst yet. When it does, you'll know, because it'll be bloody. Old coworkers will get into online arguments about politics. Suddenly everyone will de-friend everyone else and stop logging in all together. Old school chums from 20 years ago will meet each other in person and start trying to bump each other off. Farmville crops will go to fallow. Pretty soon, the government will be forced to take action.
Oh noes!
The bubble of /. article quality is going to POP!
Everyone, make sure to sell short and submit the worst that you can!
This is what they deserve. They took their chances.
... now back to the bit mines.
there is the 'future earnings booked to present' bonus
there is the executive who leaves to start a hedge fund golden parachute
there is his right hand man who leaves with him golden parachute
there is the bonus payed to the executive committee that looks for a new executive to fill his spot
there is a hiring bonus for this new guy
then some more golden parachutes and hush money when a couple people leave because they find him snorting coke in the boardroom
then there are the bonuses for performance increases
then there are the bonuses for paying out bonuses
etc etc etc.
I find it hard to believe owners believe that they own a rock solid idea or product rather than the latest fad. It must just be greed that keeps them from selling when there company reaches say 50 - 100 mil per person (they certainly don’t need any more).
As do most here I don't believe these companies are worth much more than 2 to 5 times their yearly profits as with risk added your aren’t likely to see much more back and that curve that looks exponential is just nearing the peak (as the sum of a lot of one off pulses wear out).
Nobody gives fuck about iphone anymore. Multiple bubble are bursting apparently.
One of the problems with Facebook is that most of your friends are people you already know and in many cases, people you haven't seen in years. There is a huge void which is trying to meet new people.
The other problem is the youth. I was a teen in the late '80s and if my parents knew what I was really doing when I was 15-18 they would have thrown me out of the house. Teens today want no part of a social network of parents, aunts, uncles and good grief, Grandparents!?
A "friends" network like Facebook benefits from being the largest. It is still a player. Ditto Linkedi-n in the business realm.
Groupon is an easily copied and implemented concept. Being first or largest doesnt help a whole lot. My local newspaper does a groupon-type promotion daily.
Lot of people interact on web virtually since, they have less time to interact personally. Obviously, there is bubble in social media websites but economic downturn is also a grave concern for US, Europe and then OPEC Members of Middle East. Economic melt down is also the reason that IPOs are being postponed and business houses are waiting for pleasant environment to float their Shares.
vishal dogra
The cloud is the next thing to go, as people are realizing they have these great persistent network connections to connect to the cloud with that are, incidentally, a great way to connect the cloud to data they host themselves on their home computer. Add in the magic of the cryptographically secure hash and you have a fully functional mesh network (i.e. social graph) in the application layer, no privacy issues, no spying, just control. I mean, the whole reason the cloud was appealing was it was easy and you didn't have to hassle with the computer (well, you did, but you didn't have to install anything at least). But now, I see this Windows 8 Share feature, where you can like, copy a picture to your friend's clipboard with 1 click, and it doesn't seem like the cloud stuff is really all that necessary. Especially with the hash routing ideas present in things like bittorrent, DHT, and of course the diaspora social network system. I mean, that does away with all the confusing ports and firewall stuff pretty handily, so like I think it's time to bring it back home.
Tell that to Rupert Murdoch.
Typically the deal has tipped before I even open my email in the morning. It's in no-one's best interests to have the tipping point very high - Groupon doesn't want a deal to fail, they get no cash!
For the six months ended June 30, 2010 and 2011, our revenue increased from $231.0 million to $522.0 million, our bookings increased from $373.0 million to $561.3 million, our net income decreased from $20.4 million to $18.1 million and our adjusted EBITDA decreased from $187.3 million to $177.3 million.
It looks like net income dropped 10% (to 90% of what it was), and EBITDA dropped by about 5%.
How that translates to a 90% loss in profits I'm not quite sure... Seems like it's a drop TO 90% of what it's profits were - a 10% reduction, not a 90% reduction.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
This would explain the recent spamming and in your face advertising within various Zynga games.
I used to play mafia wars until the advertisements which popped up every freaking time I tried to change the section I was in.
I used to play vampire wars until they started spamming the gifts and buying stuff (which used to crash the game every so often).
I used to play farmville till the game decided that it didn't like saving anything that I did (not to mention the ridiculous amount of cpu time and memory that it chewed up on the lowest settings).
I currently play cafe world but the amount of in the face advertising is really off putting and it only started a week or so ago. Hell, they are losing players over it daily now.
FWIW, I only play the games because my wife likes to play them and she gets me to play them to help her out.
Not exactly a thing of the past, but it's not new either. I don't think saying "it's teh economiez!" works with a sudden 95% drop in the last quarter alone. That sounds to me more like people found a better game, or for example some people simply got bored of Farmville, which led to it being less fun for their friends, which led to it being less fun for their friends, and their friends, etc, until everyone lost. Maybe it had something to do with Google+ too, though I'm not convinced of that unless G+ has lots of games already.
which is totally what she said
If you are on gmail, you are one click away from google+. If you are not on gmail, you are unlikely to have friends, stalk targets are NOT friends you hotmail user.
Oh and MySpace is very interested in your theory and how they still lost their entire userbase to facebook.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I would actually be embarrassed to use a GroupOn coupon, knowing how much it was shafting the business in the process. They get what -- 25% -- of their normal price, while GroupOn keeps another 25% for themselves in the half-off price? I truly feel sorry for the businesses who have been convinced to go this route.
The problem is you (and many others) don't understand what a Groupon should be.
For example, I bought a groupon for 50% off a winery tour. The tour resulted in a purchase of a case of wine from the winery. While I'm sure not everyone on the tour bought that much wine, the groupon got the winery exactly what they wanted: Lots of people in the winery at an off-peak time that they could then up-sell to. For them the groupon worked very well.
Groupons are not right for every business, but they can work very well for businesses that have low marginal costs, especially if set up to bring in business during off-peak times.
paintball
I've noticed a change. Interest rates plummeted and so did house prices, so it became good sense to buy a house. I'm now paying about a third in interest payments of what I was previously paying in rent (and I'm living somewhere much nicer), and so I can pay off the capital fairly quickly too. Before the recession, house prices were so crazily high that even with the current interest rates I'd have been paying a lot more, and interest rates were also very high.
I am TheRaven on Soylent News
Unfortunately where I live, housing prices have stayed much the same..
which is totally what she said
It was fresh at one point, but for me the charm wore off when I realized it was essentially a much better version of software the IC and military uses to create a pattern of life for high value objectives, so I quit last year. Not that I think my profile is gone, mind you.
For the somnambulant masses, it has simply gotten boring. A chore. How many times at parties do I hear people say "why didn't you reply to this PM", "check Facebook to find such and such directions to a party," "oh god I am so behind on Facebook", ect.
How one can fall behind with respect to Facebook remains a mystery to me, but apparently it can happen.
I am very small, utmostly microscopic.
The asking prices didn't move much, but they went down a little and people became willing to accept offers quite a bit below. 10-20% below the asking price was fairly common, and some went for as little as 40% below.
I am TheRaven on Soylent News
Why does everything have to have a big IPO to be considered a "success"?
I understand that private corporations are "bad and evil" from a governance perspective. (not that having public stock changes governance. That often makes the moral-hazard situation WORSE - - lots of money, and NO real moral hazard).
The benchmark mythology of the "successful innovative dotcom" arose out of the late 1990's; and the accompanying horrid deregulation of the stock-market. At the time, I watched co-workers as they OBSESSIVELY monitored stock prices on a continuous basis, at their desktops. They ignored analysts on news shows, and in articles, who talked about "traditional P-E ratios" - and instead, believed in what they wanted to believe: That this was a "new economy", and that the dotcoms were DIFFERENT, and that the old rules no longer applied. No seriously. The pundits started saying this, as P-E ratios shot past 20, to 100, and higher, and prices kept going up and up, and people started talking about retiring on UN-OFFERED OPTIONS, in their mid-20's.
This bubble, and accompanying IPO boom; we'd like to imagine it was because the internet was awesome (well, it WAS!) and that computer geniuses are awesome (we ARE!) and it was the time of the revenge of the NERDS dammit! (well, no, not really . . . ) this was really all a big pump-and-dump scam, designed to remove excess wealth from the middle-class.
You go back to your major index graphs. DJIA, NASDAQ, S&P, and scope them out from 1996 to present day. If you look at stocks through the lens of traditional P-E ratios, through the recent summer-of-2011 crash, they are FINALLY getting back in-line to where they *should* have been. The bubble kept them over-inflated for about 15 years. There were some exceptions. Apple. Google. Microsoft. This was *hype* that was robbed from much older, larger companies that have been sucked dry. DEC, HP, SUN, IBM, etc.
Facebook does not need to have a "big IPO" to be successful.
That was the "big-lie" of the Enron age. It allowed a few very wealthy investors to cash in. It allowed some of the best innovators to cash in. Some of the others, who weren't already independently wealthy, from the anecdotes I've heard - they diversified and sheltered . . . and tried to dodge the crash in 2000-2002. But most of them have lost most of the huge IPO fortunes they made in the late 1990's.
The gig was really "up" when Enron crashed - - - but there were still plentiful suckers out there for the IPO market. Why not - there's one born every minute. The money hasn't dried up, because the FED keeps printing more and more. They spewed it out through the home-mortgage/bankruptcy industry, right up through about 2005-2008, when the change in bankruptcy laws and mark-to-market rules began to force the market back into some semblance of sanity. The result? An economic armageddon, and a several-year adjustment in pricing to reflect the actual reality that is being forced in the credit, commodities, and securities markets by the new rules. There is still more adjustment to come, of course. Watch for a gold-crash, real-soon now.
So - whether Gropeon, or Faceplant have an IPO really has FUCK-ALL to do with whether they have successful business models. We can't just magically create money and hand it out to everyone - because it will create bubbles, (or "managed inflation"). And we can't then, just funnel all this newly created money to a few individuals, because that creates class inequality, and completely fucks up our political system (as we're watching happen over the past 3 years) - which has a serious potential for violent revolution. Which is not a prosperity-creating proposition, for anyone, in a civilization that has nuclear weapons.
We seem to have solved the problem on the regulatory, and fiscal policy side. And, I think that the business/industrial side of things has got this figured out. Zuckerman has created a nice prospect, and built it up, and no, it's not perfect, but it sure as
These are my friends, See how they glisten. See this one shine, how he smiles in the light.
Go look at the stock market moves and multiple stock market drops within the Great Depression, which was in part caused by the collapse of the Roaring Twenties. It took a decade to build that bubble, and a decade and World War II (destroying much of Europe's capital assets in the process which probably benefited us since they probably needed to buy much of what they used to rebuild from us) to recover, a period that included multiple drops over the course of over half a decade. We are coming off of a 17 year bubble, from late in Reagan's first term through the end of the Clinton administration. This is just the continuing of the correction of everything that happened in the late 80s and the 90s.
A few years ago, I read an analysis of the the history of the stock market since the War, and they indicated that the market has been running in 17 year cycles. From the 1932 low to 1966 peak: 34 years, not normal due to WW II and U.S. having unaffected capital assets coming out of the war that were used to rebuild Europe.
From the Oct 1965 peak to June 1983 when the market started to increase: ~17.6 years.
From June 1983 to the end of the internet bubble in Oct 2000: ~17.3 years, mostly inflation and credit driven.
From 2000 until the end of this current situation, if it holds at around 17 years, will come in 2017 or early 2018. The market did peak in 2007, but that was an attempt to continue the previous bubble. If you want to count that as the new date, then we need to reset and start counting from 2007, and not expect things to improve until the 2025.
If you were to read what Robert Prechter has to say, utilizing the Fibonacci sequence and Elliot Wave Theory, he believes this is the end of a 200+ year super cycle. His analysis indicates that the stock market moves in natural patterns, regardless of time periods. So, what you see in a 5 minute chart will also occur in a daily or monthly chart. What happens in smaller time scales happens in smaller increments, but it's all related. So on a daily chart, the market might go up for a month, then down for a few days. On a monthly chart, it goes up for one period, then down a little the next. So each up or down in the market is a smaller up or down in the next larger time frame. Prechter says that there are 8 time frames: seconds, minutes, hours, days, weeks/months, years, decades and centuries. The Great Depression was a collapse that was significant on the decade level, resetting things from the previous decade cycle end, probably in the 1800s. The period we are going through now is a century level correction, meaning what we are about to go through is bigger than anything that's happened since the 1700s.
I'm holding my 401k and IRA assets in cash. In about another 5-6 years, I will build a plan to invest my funds which will have accumulated to over 50,000. I'll select 4 investments, that cover a large swath of the market, and put equal parts of 80-90% of my funds in each with the remaining in a bond fund. Every year, balance the fund back to the starting percentages. This takes money out of what ever has done well, and is likely to perform less well the next year, and uses it to buy the parts of the market that have underperformed, and historically, one of those other parts will do better in the next period.
My investments will include a value or income fund (mature or struggling companies), a commodity fund (oil, gold, agriculture markets, etc), a growth fund (younger companies), and an international fund.
An aside, I presume people may decide (rightly or wrongly) that the secular program of the last few centuries has failed. We may see a large surge in people returning to religion at that time, increased conflict between different parts of the world due to economic problems and religious differences. There is an old Chinese curse that says "May you live in interesting times." If Prechter is right, we are about to live through the most interesting times the world has ever seen, a super cycle collapse compounded by our technology driven world.
e.g., not i.e.
Fool.
When I go to an event like ASSEMBLY I join the appropriate IRC channel of about 500 people. Not only do I not know most of them, I don't know who is dating who, who is friends of who, which of them have similar interests with each other, how active certain people are in interacting with each other, etc. before I explicitly get to know them and find out things like this manually... And this is all OK, as IRC isn't a social network.
I can't easily monitor my social circle (friends, family, co-workers, etc.) through IRC: Even ignoring that most of the people I know aren't on IRC, IRC is built around channels, not around social relationships. Not all of the people I frequently interact with are on the same channel (indeed, I would need to be on all the channels they're on)! I would need to analyze the backlogs of 30 different channels to piece together the data about the people I'm interested in, etc. which simply isn't practical (or possible).
Like all communication mediums, IRC can be used to build and maintain social relationships. However, it obviously isn't designed for the type of stuff that social networks are designed for. It's mind boggling how someone could not see this difference. :)