Slashdot Mirror
Australian 'Net God' Refuses to Profit From IPO
Lansdowne writes "Robert Elz, a 'mildly eccentric' programmer in the CS department of Melbourne University and the administrator of the .au domain, refused to take part in last week's A$93 million IPO of Melbourne IT, the university's commercial arm. He has been quoted as saying that administrators should not financially benefit from registering domain names. Melbourne IT registers .com.au names as the Australian equivalent of NSI. Read the Sydney Morning Herald's story for the scoop. "
Yes. You could. .com, .net, and .org shared registry system and all the legal bullshit that goes along with it.
.au domains. Period.
And then you would have to put up with the
Read: NSI and it's 'competitors' have no say over
Umm... they aren't being 'sold to the public' for hundreds of millions, they are being sold *by the public* *to the public* for millions of dollars.
ie: The VA IPO was at $30 or so. That was the money VA made. All the rest, trading at $250 and such, was *NOT* seen by VA, and they had no part in it.
Actually, if you have a good look at how modern financial transactions & economics works.... You would find that the money does *not* exist and is mostly fictitious.
One problem with the stock market, see.... let me throw an example.
1) Union workers have an investment plan through their union. (i'm being very generic here, not picking on any group in particular).
2) Big union investor types go out and find things to invest in
3) Big union types invest in other big companies with union workers.
4) Workers demand that their stocks get a good ROI.
5) Big investor types working for union put the pressure on other big copmany to make it's stock go up.
6) other company, of course, has union members in the same boat.
7) Company starts to 'downsize' and 'lay off' worker to 'increase' efficientcy.. in order to drive the stock price and profits UP.
So.. in the end, peoples greed for a 'better' return on investment caused them to get laid off in the first place.
I've been thinking a lot over the last couple of years about the "Internet boom" in stock prices - wondering when it will end, etc.
I have a bit of a theory that Internet companies like Amazon.com (not talking about VA Linux) will become the norm in the next few years, and people will expect Price/Earnings ratios of a few hundred (or whatever Amazon's is) instead of the tens we see for non internet companies at the moment.
I think that the advantage of the Internet is that it allows very low margin businesses to survive by relying on a large volume of transactions. This leads to very low profits, but domination of the market, which is growing - and will be for quite a while when we take the global market into account.
Take Amazon.com (I have no idea if the figures are right, but follow the example & correct the figures, if you don't mind) - say they sell their books at 5% above cost. Now probably 4.8% of that goes on costs - leaving 0.2% profit. Now because they are so big, and sell so many books, that adds up to a reasonable amount.
While the barriers to entry are low on the Internet, there is now the whole "Amazon mindshare factor" which need to be combatted - with money. The only companies that really have enough money to take Amazon on are the already established companies (except in specilized areas).
Now, obviously, Amazon is overvalued in comparison to establised (non-book) companies. But should the value of the establised (non .com) comapanies go up, or should Amazons go down?
Well, the Internet does allow non - .com companies to cut costs in the same way as Amazon has. When they do this, they might have to cut profits - which reduces the P/E ratio. Now if the company is making very low profits, but is dominating the industry, perhaps it is a good long term bet - those profits allow it to stay ahead of the competition, which has to cut its own margins and profits to even try and compete.
If all companies, in all sectors of the market begin to drift towards this low profit, high volume model, perhaps we will see a correction in the compatitive value of each company and sector of the market.
I know this low-profit, high-margin idea isn't going to popular with those fans of the high-profit, small "one man" company thing, but I don't see it being a long term proposition, except in emerging sectors of the market.
I'd love to hear what someone who knew what they were talking about thought about this - although I guess no one really does.
a saying we used to hear :)
Boojum
try { do() || do_not(); } catch (JediException err) { yoda(err); }
The false perception that internetworking is something new is forcing companies to concentrate on 'position position position' instead of actually applying the tech to make a buck.
I'm sure I'm not alone, being stuck in a meeting with someone who doesn't understand the value of a network. Someone who, when describing the internet uses words like "exciting" and "new". (reminds me of the old loveboat theme:).
When you find yourself in a meeting with someone who has seen one to many .com advertisements and wants pie in the sky things out of your network, use these little tools to deflate there position and keep them grounded in reality and out of the hype high.
1) Bring several printouts of Hobbes' Internet Timeline to the meeting and let them take it home to read.
2) Use the term 'Internetworking' instead of internet to illustrate that this isn't anything new.
3) Point out this is an evolution of many high minded ideas and compromises that have evolved internetworking to where it is today.
4) Point out the many protocols that have run over IP, each proclaiming themselves to be the new new thing.
I have found these tools to be both educational and informative on many occasions, and it helps bring the discussion down to a real world level where real work can be done. So the next time you find yourself in a meeting with 'consultant-of-the-week'. I hope you find these tools useful.
_____________________________________
the last thing Mr. Greenspan is ever going to do is come out and say that one of the largest areas of the stock market is just so much vapor--because that would send everyone racing to sell their stock and ditch all tech investments, which would kill that sector of the economy.
You seem to be ignoring the fact that Mr. Greenspan has in fact done exactly this on more than one occasion. Remember the 'irrational exuberance' speech? Mr. Greenspan is a firm believer in correcting problems as soon as possible. If he felt that the internet 'bubble' was indeed a severe problem he would come out and say so in hopes of catching things before they turned into a bigger problem.
But, now that's he's been mentioned on Slashdot, it might be appropriate to blow his trumpet a little bit. He did a whole lot of interesting things for Unix during the 70's, including the first disk quota implementation, and was apparently very important in the early years of AUUG (the Australian UNIX Users Group).
Australia, including Elz, played an important part in the development of the Unix culture. There's a book called Twenty-Five Years of UNIX which discusses some of this.
Any sufficiently advanced technology is indistinguishable from a rigged demo
--Andy Finkel (J. Klass?)
Dunno, I think if that I was offered legal money that I considered dirty for my own reasons, I'd take it and make a point of donating it all to worthwhile causes. Sticking with your principles and doing nothing is fine, but leeching off the evil bastards to make the world a better place is even better.
2 highly principled people (within weeks), with the will power to actually stick to their principles when HUGE wads of cash are dangled in front of their noses. My belief in humanity is slowly coming back
Anyway, this guy's goal should be to have the profits put back into the university to improve learning. New computer labs, new courses, more faculty, smaller classes. It's okay for profit money from the community to flow into the university just make sure it goes right back into the community to help everyone.
Now I can see that it's not just the USA stock market that laughably overvalues it's internet stocks, in fact, the entire world overvalues anything that has to do with the practice of internetworking computers (a 30+ year old technology).
The internet bubble will adjust it's valuation (read:crash) and people will wake up to find they invested there life savings in a Pentium II on a fractional T1 in the university janitors closet.
_____________________________________
What bothers me about this whole thing is that a lot of people, RMS included, are acting really high-and-mighty and ripping on people like ESR who made money in the last few weeks. Now, personally I think ESR's post-wealthy statement here was completely unneccesary and more than a little bit on the arrogant side, but it's still nobody elses business how you conduct your finances.
We all know that ESR made a bunch of money with VA, and I think that's really what counts. If we see him wearing "VA Linux Rulz U" shirts on the circuit from now on, we'll know why. The act of making money shouldn't put someone's credibility into question, it should be a question of if they sell out afterwards. Look at JWZ -- he must have made some money from Netscape; if I were unemployed this long, I'd be searching through garbage cans for tomorrow's meal. Despite this, he has still been wonderfully critical of the hand that feeds him.
That said, remember: Being a one of the three-initial gang never included a vow of poverty. If any of them want to take advantage of the opportunity to live comfortably for the rest of their lives, that's their business. We shouldn't sweat it; if it ends up effecting the way they act or if they start doing something stupid (mindless disto-specific boosting in public, etc), the same community which lends them credibility can take it away.
----
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
One thing to note, with the currency rates, $125 AUD==$80.31 USD.
.com, .net, or .org address for cheaper, and without having to type in three little extra characters.
The article claimed that they had set up "a commercial margin, but a very small one". Now, who exactly do they go through? With our competitive brokers in the US, Joker.com costs $37 for two years, while OpenSRS claims to cheapen even that by a little.
Just seems to me, that maybe they're overpaying. Heck, you could just as easily get a
I remember back when being a member of the TLA crowd just required a vow of lunacy. With all the mainstream attention and respect these people are getting, now, that committment to insanity seems to have been severely undermined.
At least we know we won't be seeing RMS promoting electric shavers any time soon, eh?.
"If one is really a superior person, the fact is likely to leak out without too much assistance" -- John Andrew Holmes
[1] historical reference (it might have been plato) about a greek philosopher who was challenged by local merchants that he did nothing with his life and could never make money. He proved them wrong by carefully analyzing the market and then buying out olive production in the area. Next spring olives were in short supply due to a dry spring and he made a killing. Feel free to correct me here, I'm sure I've made some minor factual errors (I didn't spend as much time awake in philosophy class as I wanted to).
... take a look at this article. This highlights the contrast between the traditional bread earners and the so called new IT revolution. One needs to question what is wealth creation or even the definition of profit. The capitalisation of a company is nothing more than the expected discounted income stream plus expected growth. Hence if a company is valued at say $1 billion, shareholders expect a company to earn at least that much in profits (or revenues in the case of .com fluff) over a period when it is deemed to have a competitive edge. For some strange reason the assumption is that share price is roughly analogous to dominance in market share (ie the number of customers you "own") which seems a little presumptious considering that with the reduction in transaction costs, there may be multiple paths/sources to obtaining the same good or service. Thus as soon as a new competitor arrives, the share price drops to indicate a dilution of the market. Why would an IT cartel have such a high "value" compared to a farm which produces so called essentials. Basically it relates to the laws of supply and demand and people mistaking a trajectory which they assume continues forever. Domain name registrations will slow down once every business and person has an account (or we run out of recognisable letters). Once the marginal costs reduce down to the actual operating costs of renewing a site, then you will see some serious cash-flow hiccups along with brutal competition to keep others from poaching your customers. and then maybe it might be smart switching your vaporcash into a real farm. IT companies only have growth potential so long as their products result in improved productivity and capabilities. Once the stress and pain becomes too much (as in the case of a not-so-popular OS) then people start resisting. The real competition to software is not other players but your historical software and customer habits. People tend to underestimate the risk premiums in share prices and until a crash or two happens to kill off the ignorant, rationality won't return to the share-market. Also, it would help if politicans kept their meddling hands out of the pot.
LL
Last thing first, like Mores law, Metcafs law (N^N) is a self serving observation of a trend, not a scientific fact. This trend is directly related to how open the network is, and is based on a trust model. As more companies are added, look for companies/governments to set barriers to connectivity (Read:AOLs IM, .AUs oppressive laws, proprietary broadband boxen..ect.)
US internet companies are in a strong position to gain a disproportionate share of the value of the GLOBAL process.
I'm sure many over the border users will attest to the fact that there isn't much global about the internet today. A(merican)SCII text being pushed from domain to domain registered by NSI.
If our good friend Mr. Berners Lee had chosen to name his approach to hypertext "European Wide Web" (EWW just doesn't have the same ring to it:) ) would you be toughing the eventual penetration in the EU community instead of extrapolating projections globally?
I would put forth that the reason the global penetration is so low is because there's nothing world wide about the world wide web. It's very American, and it's growth should be extrapolated as such.
It costs most companies between $50 to $100 to handle each and every purchase order and requisition. There is NO NEED for this
I can assure you there is a need for this. ISO 900* certification is just one example of the many G&A tasks that can benefit from automation, but never be replaced by it. The question still on my mind is how much of the ~30% G&A cost is expected to be resolved be increasing connectivity? 2%? 5%? maybe 8%? connectivity and convergence is a communications evolution, *not* to be confused with revolution. We have been in the midst of the evolution for over 30 years, and it will continue to evolve. Some examples:1)wearable computers =your beeper
2) Instant global communication =Iridium
3) Computing extending human capabilities =Palm Pilot
4) Wireless Computing extending human capabilities =Palm 7
Again, note the emphasis on evolution, not revolution.
All of these solutions were achieved because the capitol and technology just happened to be around at the time. Where would the Palm7 be without a well distributed PCS network? Where would PCS be with out a well distributed Cellular network . . Again, note the emphasis on evolution, not revolution.
So to sum up the act of internetworking is in the midst of a 30 year evolution and will continue on that path. Just because 95% of people are just waking up to that fact does not mean we should loose our heads with over speculative projections. I thank you for your time and attention and welcome any comments.
Oh!. and one more thing: Companies like AT&T are not spending $2000 per house that their cable goes by just for internet shopping. It's abouttelephone + videophone + interactive video + all sorts of ecommerce + telecommuting + banking + ...
Take the $2000 and extrapolate that over the life of the twisted pair phone network in the USA and it's a trivial investment. Fact is, this is the first time AT&T has actually has been asked to increase bandwidth to the end users (something that shouldn't be shocking and amazing), So this particular out-pouring of capitol should be spread over the life of the network they are upgrading.
_____________________________________
Your quote of the 1st. point he made, I agree with completely " The internet is having a measurable and strong effect on improving economic efficiency and worker productivity in the US". Email instead of faxes, the publish/subscribe information model, and the low barrier to entry result in measurable increases in productivity. However, these advances in the business model are only advances while a difference between companies exists. It's the last point, the low barrier to entry, that will render this market influence ineffective. Even the most casual enterprise (read:the late 90's .com rush) will dilute the .com brand name, and the marketing buzz that goes with it.
On the 2nd point: "It is quite clear that the internet is in its very early stages..." is exactly the kind dangerous thinking that leads to overvaluation. Pump it out on TCP/IP and buy a little advertising time for your domain and you're at the forefront of a new economy? I just don't see it. I just don't understand the growth projections being as high as they are. maybe I'm to close to the tech to see the big picture, but I just don't understand the value of a companies IT department taking the company BBS and slapping a HTML front end on it accounts for "having an inevitable impact in the shape of the economy for many years to come."
The 3rd point: "... and may in fact be undervalued." are based on future projections of internetworking penetration and usage. It's an interesting observation, and may well be true, but there's that old market warning "past performance is not indicative of future performance" that could be aply applied in this case.
I think VALinux is Proof that the tech sector is overvalued by people not close to the tech, overvalued by people not even vaguely familiar with the companies ability to make a return on there investment. It's like betting on a horse based on his position in the starting block. The false perception that internetworking is something new is forcing companies to concentrate on 'position position position' instead of actually applying the tech to make a buck.
_____________________________________
Has anyone noticed the stark parrallels between todays stock market conditions and those of just pre-great depression conditions? Stocks that are not actually making any money and usually are losing it are being offered to the public and being sold for hundreds of millions of dollars... It's pretty common knowledge, in the geek circles I move through at least, that pretty soon somebody is going to realize that none of these companies are making money, and pretty soon everybody is going to realize it, and then what happens? The soaring stock market begins to drop, like an investor out a window. Also, just before the big crash back then, all the analysts were saying things like 'This is the most prosperous time in America ever! By the looks of things, this upswing will never end!'. But it did. And I think it's going to again. So in a round about way, it's probably just as well that Elz didn't take the money, it'll probably be worthless in 3 or 4 months anyway.
Piet Beertema never asked for compensation either. The registration he set up in Holland was seen as an example in several other European countries.
-------
Warning: Slashdot may contain traces of nuts.
nothing is wrong with making money
but it's another thing to have principles and stick to those principles when they're tested.
And why was my original comment moderated down?
I makred it off topic myself, it doesn't need some wanker with moderation points to go "Hey this here's off topic" Third time in a week this has happened. I get asked a question, the answer doesn't pertain to the discussion, and so it gets moderated down. Sorry, rant over
According to the article, he is still the main administrator for .au, and Melbourne IT only has a 5 year license. In 2001, it expires, and it would serve them right for him to grant the contract to someone else, since they have since disobeyed his explicit wishes and raised prices on these domain names. Or at least renegotiate the contract so they have to follow his wishes about pricing.
I find it ironic that Gerrand "thinks Elz should be honoured" for his position, but won't honor Elz with his own actions. What an ass.
Communication is only possible between equals