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.

Comments

Re:given the state of the economy,

[Cinder6]

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.

Re:Overly dramatic headline

[m50d]

If you're buying it not because it's worth that much but because you think someone else will pay more for it, that's a bubble right there.