Posted on 02/17/2011 5:44:18 AM PST by chickadee
Talk of bubble trouble is rife again in Silicon Valley. Private internet companies with names barely known in the financial world a year ago are suddenly the focus of heated price-talk – even if they have yet to prove they can raise money at some of these lofty levels.
(Excerpt) Read more at ft.com ...
well, I can see people back in the days asking questions like what the heck is this company “apple” (or “yahoo”) supposed to sell?
Some of the start-up companies will succeed beyond the wildest dreams of investors. This is called capitalism and it has been proven to be superior economical system.
To assign a value of $6 BN to a coupon idea is ludicrous. Anyone can replicate the process.
The Groupon guy was doing the greed squad a favor by not selling his pile of nothing.
well, anybody can set up a webshop (but only amazon got a dominant position), or some social network site where you can update your status etc (but only fb got dominant position).
Some companies will end up in dominant position, even though it looks easy for everybody. Brand recognition, and being early may be enough.
Amazon was on rocky ground for a long time. Through excellent ideas and diversification, Amazon seems to have pulled through. Not to forget that Amazon invented Kindle - a real product. And it sells real goods. Amazon has managed to drive most of the other online booksellers to the brink. It remains to be seen if those booksellers’ brick and mortar business will survive. Amazon is more of a retailer than anything else. It just does it better than anyone else. There is almost nothing that can’t be bought through Amazon. Their free shipping policy and their returns policy make them a dream for the consumer.
One other thing that Amazon has done is the customers’ rating of products. This is an educational service beyond compare. (Can you tell I am a big fan of Amazon?)
These other entities are nothing. They are air. They depend on the fad of the moment. Just ask AOL how quickly that can change.
ROFLOL, takes a lot of chum to attack the sharks. It takes proof, called income to make it an investment. The other one is called betting.
This happened once before, didn’t it?
*** This happened once before, didn’t it? ***
It did and not that long ago. It was called the dot.com bubble. We are all still suffering from the housing bubble. Anyone who invests real money in FaceBook or Groupon will get exactly what they deserve.
I see a combination of stupidity factors.
1) Many companies are awash in cash. They made themselves this way in anticipation of a major economic crash.
2) The major crash hasn’t come yet, likely because all these efforts at insurance “emptied the boat” enough so that the hull rupture is above the water line. Which works as long as everybody sits in the lifeboats.
3) But eventually there is going to be contention, with some advocating investing the money in something, anything, instead of letting it sit idle. Unfortunately there are few, if any, good investments out there. Either the risk is too high, or the yield is too small, as far as the believers in self insurance are concerned.
4) Then enough fools are going to climb back aboard the boat, which will promptly begin to sink again.
Thanks - a very interesting take on the subject.
At least until we are called upon to bail them out.
'Twitter' (whatever the f--- THAT is) is "too big to fail", you know!
;-)
@ #12
Ouch, that was painful, lol.
A perfect example. Perhaps we should stop calling them bubbles and start calling them tulips.
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