Instagram: Bubble, Bubble, High Tech Trouble?
Posted 15 April 2012 - 11:48 AM
Of course, this is a ridiculous frankly stupid deal. Will FB *ever* get $1B of value out of this? Of course not! If they are lucky, maybe a small fraction.
There are (should be!) a lot of questions about why and how this could have happened. A lot had to do with personal relationships, etc. And, we will probably never know exactly why this could have even been on the table to begin with. I'm not sure I'd like to know.
But, it's clear it makes FB and Zuckerberg look really naive (and dangerous for future shareholders), and that this 18-month old company with no revenues was the world's biggest recipient of pork-barrel-aid.
This follows on the heals of deals like the Groupon IPO which has already proved to be a major Wall Street/Silicon Valley insider scam. These kinds of deals *only* benefit the deal originators, and never the public shareholders. Groupon will implode. This deal will never make sense. Only the architects will benefit.
This BS has to stop. For all the millions of hard-working, smart, dedicated - but not connected - people out there busting their assess to start and grow valuable, legitimate businesses, this kind of rubbish just makes it harder.
The media can't dance around this, either. Call it what it is! Don't speculate or ruminate on it's validity when it clearly doesn't make sense, and stop perpetuating this myth that these out-of-the-park deals are the way things are, and what we should all be aspiring to or just hang it up.
Bubble potential, indeed.
Posted 15 April 2012 - 11:55 AM
Posted 15 April 2012 - 11:02 PM
They got the idea from land developers; stake a "choice property", provide "vital improvements" without immediate profit, then unload your property on a "builder" for ten times what you put into it. You're in and out in less than two years if you do it right, and ready to roll your cash over into a bigger better deal.
Oh wait -- there was a real-estate bubble too, wasn't there?
Posted 16 April 2012 - 12:44 AM
Posted 16 April 2012 - 01:36 AM
That was mainly a defensive move, not triggered by a common belief at Google that innovation is dead as value-driver. Google had to do something in the wake of Apple+MSFT going after them in court. They had to create leverage.
In court, I think you can speak about innovation all day long, without it having much impact at all on any actual cases. Those cases, though, could shut your business down, so you MUST act!
Posted 16 April 2012 - 05:43 AM
Posted 16 April 2012 - 08:42 AM