Facebook, Instagram, Ben Bernanke: Thank You For the New Tech Bubble 124
pigrabbitbear writes "Those who continue to inflate the tech bubble will be quick to remind us all of how they've learned from the past. That this time, it's simply different. They do have a point. Silicon Valley (and Alley) have matured. Startups these days are focused, driven, and efficient, creating products that people actually use. In a period of less than a year after its launch, Instagram was used by 5 million users, who by August of 2011 had uploaded 150 million photos. But even with these impressive results, it's impossible to ignore the fact that many of the fundamental economic factors that led the first bubble remain."
A couple other readers contributed similar articles — Instagram's sale seems to have solidified the idea for many that we're in the midst of another tech bubble, though some are more certain about it than others.
Regarding bubbles.... (stock related) (Score:2, Interesting)
I bought 14 stocks during the dot com boom and I sold everyone of them 90 days after I bought them.
It was a very profitable year.
The bubble now that everyone should be paying attention to is gold. It's at a ridiculous valuation, it's unsustainable and when you hear companies marketing to the general public that they should switch from greenbacks to dollars, you know you should steer clear.
I am loading up right now on a gold short (ticker: DZZ). It's a position that, once gold's price collapses, should rocket up. Besides you have very little chance of being part of a company that Facebook is going to buy anyway.
Be fearful when others are greedy and greedy when others are fearful.... Warren Buffett.
Simple Explanation for Instagram (Score:5, Interesting)
For anyone who's still scratching their head about the instagram purchase, here's something to think about.
At least one of Instagram's employees, Philip McAllister, was at Gowalla when it was picked up by Facebook less than 6 months ago.
That guy might be the luckiest bastard in the world, having worked for 2 tiny companies whose only significant accomplishment was getting acquired by Facebook. On the other hand, Zuckerberg could just be funneling company money to friends?
How many of the 5 million users are spambots? (Score:5, Interesting)
I'm always perplexed why the quality of the number of users is never challenged.
How do you know a ton weren't generated as apart of some marketing strategy?
Or rather, how can you NOT suspect that a significant portion of them aren't fake?
Has the issue of verifying online registration as belonging to an actual, unique person been solved with absolute certainty while I wasn't paying attention?
- tgg
Crucial difference from Bubbles Past... (Score:4, Interesting)
Re:Easier and cheaper ways to do that. (Score:2, Interesting)
Or you dump 1/10th of that money ($100 million) into creating your own app that does the exact same thing and is tied to Facebook.
And instantly its compared to Instagram and if its head and shoulders above Instagram then everybody would be screaming "why didn't they just buy Instagram".
Also another angle is that it keeps it away from google and google+, avoiding a battle between Facebook's photo-sharing capabilities and Google+ + Instagram and there shiny, shiny marketing campaign to lure photocentric people away from g+.
Netscape. (Score:3, Interesting)
For a while there, everybody used the Netscape browser and the Netscape portal page was the first thing everyone saw. That is, until Microsoft got around to making a better browser and the Apache server ate Netscape server's lunch. I believe Mark Zuckerberg was around 10 years old at the time.
Remember when they were trying to guilt their users into upgrading to Netscape Gold for like $30-40? Hilarious!
Re:Products (Score:3, Interesting)
Creating products that people use is easy.
I'm not so sure that's exactly true. It's easy to throw up a web site, a bit harder, but still possible to push up its visibility. Getting people to use it? Not sure sure anything short of voodoo makes that happen. I still don't really get twitter. Seems like voodoo to me.
We'll see about that... (Score:2, Interesting)
2015. You, me, and a hat.
It's a Facebook Stock price scam (Score:2, Interesting)
Look, Facebook is not buying Instagram with only cash, it's a cash/stock swap deal and likely mostly stock. Basically Instagram is swapping its worthless/worth little paper for Facebook paper which is equally worthless ($60 billion my ass).
If Instagram thought it was going to be mega then it wouldn't be swapping its own stock for Facebooks because it wouldn't benefit from that. Instead the deal is like this:
Facebook to Instagram: we buy you for some ridiculous sum. We pay you in shares, and you pretend that those shares are the real inflated value we say they are. So we say we've bought you for $1 billion, you talk like we really gave you $1 billion when we actually just gave you Facebook paper, that way people will think that Facebook paper is worth the $1 billion ready for the IPO. If you do it convincingly enough you can cash out soon after the IPO and take real money.
That's about the measure of it, it's a pure stock price pumping scam just before Facebooks IPO.