Do Big-Money Acquisitions Mean We're In a Tech Bubble? 266
Nerval's Lobster writes "When a major IT company pays a reported $30 million—roughly 90 percent of it in cash—for an iOS app with no monetization strategy and a million downloads since launch, is that a sign that the tech industry as a whole is riding a massive, overinflated bubble? Yahoo isn't alone, by a long shot: over the past couple years, a few apps have been snatched up for enormous sums—think Facebook's $1 billion acquisition of Instagram in 2012, or Google buying Sparrow for a reported $25 million. Nor has the money train stopped there: in a pattern that recalls the late-90s market frothiness for anyone over the age of 28, a handful of tech companies have either launched much-hyped IPOs or witnessed their share price skyrocket into the stratosphere. But does all this IPO activity and app-acquiring actually mean 'bubble'?"
yay for bubbles (Score:5, Insightful)
get it while the gettins' good, save the money - don't blow it, then get out
rinse and repeat, pt barnum was right
Comment removed (Score:5, Informative)
Re:yay for bubbles (Score:5, Insightful)
Indeed. Looking at the college loan bubble...as well as the new real estate / mortgage bubble...I am without words. We just went through this not even a decade ago, so...why are we doing this again?
As for the 'tech' bubble...these are purely fluff acquisitions...good money paid for crap...that makes the original DOTCOM bubble look rock solid in comparison. I don't have the figures in front of me, but I've read some of this stuff recently...we're looking at paying premiums for companies in excess of their earnings for the next 50 years...many of them aren't even paying a dividend, so the only money that can be made is by selling it off to someone else who thinks it will go higher...or possibly someone who needs to claim a fictitious loss through some mystic means. Like Instagram, a number of these companies don't even seem to have anything resembling new technology.
From what I've seen, the heart wood of the tech sector has given out, and it appears to be shrinking. We're seeing a compacting of the tech sector, not new energy.
An easier way to chart things is to ask the tech sector "have your wages risen greatly, on average, in the past three years, allowing for inflation?" Find out which sector is seeing a rise in wages, either regional or global, and you'll know which one is currently enjoying a boom. Last I checked, which was a while ago, the Australian mining companies were doing pretty well here.
Re:yay for bubbles (Score:4, Interesting)
The 90s dotcom bubble was run by nerds, with tons of big ideas for what the Internet should be, but little business sense, and even less long-term work ethic. They were given boat-loads of cash, with little to no strategy for long-term success. The really good ideas stuck around (see Google, Amazon, eBay) while most fell by the wayside.
The current bubble seems more like an intentional inflation, trying to catch the same lightning-in-a-bottle. Except this time it's being run by more business minds, less nerds. People who were perhaps old enough in the late 80s to grasp Gordon Gecko's "Greed is good" mantra, but not old enough in the 90s to catch the dotcom wave. They want to recreate that magic and just pocket all the free money. Thus your observation that the "heartwood has given out." There are no eBays or Amazons this generation, just faux-photo filters and Pissed-off Poultry.
Yes (Score:3, Interesting)
I live in the San Francisco bay area and the general vibe in this area is very reminiscent of how it was during the dot-com bubble of the late 90s. Lots of easy money is being thrown around, there's a housing shortage and rents are sky high, and my phone is ringing off the hook with requests for job interviews and I'm not even on job boards anymore.
Yes, it's inflation driven (Score:4, Insightful)
Yes, it is a bubble, but it's not simply a tech bubble, it's money bubble this time. It's all inflation, people are looking for place to park value.
For all the Keynesians that deny one of the 3 major functions of money (storage of value), that's what you do when you print and print without regard to the actual purchasing power - you force people to look into alternative ways of storing purchasing power, and obviously with the interest rates being pushed down by this same action by the Fed and other central banks around the world, there is no yield.
Savers, investors are in a search of yield and they can't find it. That's how bubbles form. While the Fed is trying hard to reflate the housing bubble it doesn't really control what the inflation goes into and when it comes rushing out, so it results in higher stock market prices, higher asset prices that go up in bidding wars, whatever people can think of, anything that is not the paper printed by the central banks.
It will burst, what will be the second worst of the bad is unclear right now but the worst of the bad will be USD denominated debt, bonds, dollars themselves.
Re: (Score:2)
Where did you get the invention that Keynesian economics denies the storage of value? I'm not willing to argue to support a straw-man of my own position.
Re: (Score:2)
Re: (Score:2)
It denies the storage of value aspect of money by not realising that money printing is inflation itself and inflation of money supply causes destruction of value of a single monetary unit.
Keynesians deny this simple fact, which is why they are so confused by something that must seem to them to be a paradox: inflation and simultaneous rise of unemployment. It's not a paradox, it's only a paradox if you don't realise that inflation destroys value of money, thus kills investment opportunities and destroys prod
Re:Yes, it's inflation driven (Score:4, Insightful)
There are no Keynesians. Keynesian's would run surpluses during good times.
Those who call themselves 'Keynesians' are just money printers who found an economic philosophy to act as a fig leaf.
Re: (Score:2)
The last one was Clinton.
The problem is that Americans have a tendency to elect the candidate who promises the most, not who runs the best economic policies. If you elect a spendy government as soon as the previous one has fixed the economy and started to run a little surplus you'll never get sustained Keynesianism.
Re: (Score:3)
Re:Yes, it's inflation driven (Score:5, Insightful)
Keynesian's would run surpluses during good times.
Yes, which is what Keynesian economics advocates. Also, these surpluses should be used to pay down debt that was accumulated during the last economic downturn or accumulated to make a rainy-day fund to shore up the economy during the next economic downturn or (and conservatives will be shocked by this) taxes be reduced so that there is no longer a surplus.
However, parent also seems to confuse what is recommended by Keynesian economists (who broadly believe these recommendations) and the actions of the politicians, who often ignore actual economists (of any stripe), which seems to be some odd tactic to discredit Keynesians simply because (just like most normal people) politicians don't listen to them.
Re: (Score:2)
No, we really don't. That's crazy. If you can't accept that temporary inflation can be considered a good thing to address the long-term harm caused by downturns. Keynsian economics just acknowledges the social costs of individual poverty can be irreversible, whereas inflation can be countered by austerity in good times.
The fact that you invented an opinion for those you disagree with shows that you don't really have much confidence in your own position.
Re: (Score:2)
That's a lot of unsupported assertions.
Re: (Score:2)
What I went looking for was explanations of mechanisms, hard economic theory, and deeper understanding.
What I found complaining, was regurgitated aphorisms, and more unsupported assertions with a small pile of trite dismissal of poorly imagined counter-arguments. Along with paranoia complaining about moderation. Like you think you're a lone voice of sanity, calling out millions of educated skilled economists, but lacking anything nearing academic backing for your own assertions.
Your journal is really more
Re: (Score:2)
Ok, I know my way around Austrian Economics, and it seriously lacks credibility due to its complete reliance on the efficient market hypothesis. It's putting a lot of complex math on a couple of premises one of which is critically flawed.
Re: (Score:2)
Re: (Score:2)
How is inflation theft?
Doesn't inflation happen because people generally get raises as they work longer, thus they have more money, thus stores can charge more?
Otherwise, people would just get richer and richer without bound, and the prices would be the same, thus making things *seem* cheaper.
(I'm not saying I like inflation, I hate it.. I especially hate the TRICKY package shrinking-but-make-it-look-the-same-size. Of course, I p
Re: (Score:2)
Yes, and if I make more money due to a raise and prices don't go up, I HAVE MORE PURCHASING POWER.
I only skimmed the orig message for now, I might have other responses later.
Re: (Score:2)
Re: (Score:2)
Oil and gold? Two non-bubbles. Gold isn't even at historic highs, for that it would have to be 1:1 with DOW, and it's nowhere near. Gold is very very cheap now.
As to oil, the US is using smallest amount in decades, it imports smallest amounts in at least quarter of a century, the production capacity is greater than ever and yet the prices are going up in dollars, but not in gold, not in silver. Again, oil is quite cheap if you are not buying it in dollars. It's the dollars that are cheap, and the demand fo
Re: (Score:3)
Gold isn't even at historic highs, for that it would have to be 1:1 with DOW, and it's nowhere near
That's not really a reasonable comparison. First, the Dow is a bit arbitrary -- it follows only a specific group of 30 companies that are supposed to represent the US economy. Here are a couple of articles at different times about what would have happened if Apple had been added:
when apple was up: http://usatoday30.usatoday.com/money/perfi/stocks/story/2012-02-15/apple-stock-dow-jones-industrial-average/53109426/1 [usatoday.com]
when apple went down: http://blogs.marketwatch.com/thetell/2013/03/05/apples-not-in-the-dow [marketwatch.com]
Re: (Score:3)
Assume for a minute that the Dow is a perfect way of tracking what it's intended to track, with no flaws. So it perfectly mirrors the US economy. The reason you buy gold -- rather than invest in the stock market
Re: (Score:2)
The money is going into the stock market, just like it did in the late 90's. I thought this was uncontroversial? It's explicitly stated Fed policy. They are buying up all the Treasuries (and effectively financing the US deficit with inflation as a result), with the end goal being to force everyone else into riskier assets. This, Bernanke believes, will invigorate the economy. Because there's nothing like forcing people to gamble on the stock market to build a strong foundation!
Re: Well, duh. (Score:3, Interesting)
No (Score:2)
All that money printing has to end up somewhere, some of it has made it to tech companies but it's hardly restricted to tech companies.
Re: (Score:2)
What's a bubble? (Score:2)
Almost by definition, it is impossible to see a bubble except in hindsight.
Re:What's a bubble? (Score:4, Insightful)
I saw the housing bubble. In 2006, specifically, when working as a programmer for a mortgage titling company. I just saw the numbers going into the database and realized that there's no possible way this could work in the long term - there were tons of refinanced loans for lower monthly payments that did nothing to pay back the principal, which more-or-less guaranteed that eventually the borrower couldn't pay.
I could see it, and I wasn't trained to see it or supposed to be looking for it. But it was there plain as day.
Re: (Score:2)
So you shorted the mortgage companies, RIGHT?
Re: (Score:3)
No, I didn't, because I didn't know how high or long the bubble would go before it popped, and I was completely broke at the time. I did, however, keep the financials completely out of my portfolio.
Also, buying put options is typically less risky than shorting.
Re: (Score:3)
It's not that hard to see bubbles.
What's hard is timing them and making money off of them.
The market can stay irrational longer then you can stay solvent.
Re: (Score:2)
Exactly. Betting against The Herd is hazardous, unless you are very sophisticated. That is not a game for the Little Guy to play. Take your money far, far away from the stampede.
The Giant Red Flag was apparent circa 2005 (IIRC), when The Economist magazine noted that housing prices were so far out of skew when compared to rental prices in almost every major metropolitan city in the world that buying a home looked completely irrational as a financial decision.
Re: (Score:2)
dkleinsc claimed:
I saw the housing bubble. In 2006, specifically, when working as a programmer for a mortgage titling company. I just saw the numbers going into the database and realized that there's no possible way this could work in the long term - there were tons of refinanced loans for lower monthly payments that did nothing to pay back the principal, which more-or-less guaranteed that eventually the borrower couldn't pay.
I could see it, and I wasn't trained to see it or supposed to be looking for it. But it was there plain as day.
I saw the bubble in 2004.
My wife and I had just moved to Las Vegas - one of the housing bubble's domestic epicenters - and went looking for a house to buy. Nearly every property we saw had already been sold by the time the "for sale" sign went up on its lawn. Houses were selling for 20-40% over asking price within 45 minutes of appearing on the realty industry's MLS. Often, the same houses - having never been occupied by anyone other than a painting crew - would be back on the market three
Re: (Score:3)
The obvious answer is... (Score:3, Insightful)
No.
Insane financial valuation theories mean we're in a bubble. Big money acquisitions can happen for a number of reasons. A lot of them are side effects of the insane theories. This one isn't.
They didn't pay $30 million for the App with no monetization potential, the second sentence of the first link is "Yahoo said it plans to close down the actual app and use the algorithmic summation technology". They paid $30 million for his algorithm and to hire the talented mind that conceived it. I don't know what's unique about his algorithm or it's results, but that's what the acquisition was about, not the app. Apparently it can do something Yahoo's wanted to do but was unable to accomplish. It may have been a bargain.
The first sentence of the summary contains a claim invalidated by the second sentence of the link. Seriously? Not even the submitter or the editor could RTFA?
No (Score:2)
Bubbles are funded by outside investors. In this case, the money for the big aquisitions comes from other tech companies, which means that they have a way of making that money somehow.
Re: (Score:3)
Bubbles are funded by outside investors. In this case, the money for the big aquisitions comes from other tech companies, which means that they have a way of making that money somehow.
. . . which means that they think they have a way of making that money somehow.
Re: (Score:2)
Those dollars have to come from somewhere. If tech companies can afford to throw that much money on risky bets, then they are doing very well.
Re: (Score:2)
This is Yahoo we're talking about.
They don't have a way of making that money somehow. Also, they have no fucking clue what they are doing, and are throwing money at the problem without knowing what the problem is.
Re: (Score:2)
Re: (Score:2)
Dividend paying stocks.. Get a couple percent a year in dividends, and maybe even make money on the stock price rising.
Re: (Score:2)
Still time to raise (Score:2)
hiring bonus (Score:2)
They didn't really buy the app, they hired the guy. The $30m is effectively a hiring bonus. That's how a lot of the big tech firms attract talent. It's not a sign of a bubble, it's an indication of how difficult it is to find good people. People don't know what it is, but somehow there's a big difference between someone who can program iOS and someone who can make a successful app, and that difference is worth it to these companies.
Trying to stay relevant ... (Score:3)
I think what we're seeing is a bunch of tech companies who got rich in the .com era struggling to stay relevant.
I assume Yahoo still has a search engine, but I've not been inclined to use it or look for it in a *long* time -- like since Google came into existence.
Now with Facebook and all of these other companies which are relatively recent, the old guard is trying to make sure they keep market share and features people want.
And, really, the tech industry has been going through fairly steady acquisitions for quite a while ... it's become normal operating procedure. Buy a company with a product you like so you can get their features and customers, and hopefully integrate the features into your platform.
We may or may not be in a tech bubble, but tech companies have been buying smaller companies for years ... that's just how companies grow these days.
google does it all the time (Score:2)
i haven't kept up this year, but until a few years ago Google was buying dozens of start ups every year. most with no profits or hope of profits
most start ups end up being acquired because they have no hope to monetize their idea by themselves and need a partner. nothing new. drug industry is like this. small start up companies make the drugs and the brand names you hear about buy them up or the distribution rights. almost like TV and movies.
talent acquisition (Score:2)
I'm not saying we aren't in another tech bubble -but I don't think Yahoo!'s buying Summly says anything about the industry in general.
Fast Company probably has it right [fastcompany.com] - that this was more about hiring talent/changing company culture than about the actual business value of the app.
Re: (Score:2)
Re: (Score:3)
Revenue. Profits. (Score:2)
It doesn't really matter how many downloads an app has, how many page views a website gets, how many registered users a social media site receives, how many subscribers a YouTube channel has, how many Twitter followers a celebrity has, how many potential customers a marketer has in their mailing list database, or any other inflated, meaningless number that is being thrown at you.
Conversion Rate matters. The ability to generate sales, matter. Web 1.0 imploded because websites were being purchased for fanta
...Advertising (Score:2)
Virtually NONE of the sites had a proven model for earning income. The entire thing could be chalked up to "get eyeballs, we'll figure out how to sell later."
...Advertising. Googles profits last quarter hit a record $2.89bn (£1.83bn)
Yahoo has a monetization strategy (Score:2)
Yahoo already has a way to make money off delivering content, one that yields $5B in revenue per year. Several other major companies use the same strategy.
This product may not have a separate monetization strategy of its own, but if it provides a competitive advantage to Yahoo, then it may well provide value to them in excess of the $.03B they paid for it. That's not a bubble; that's paying for an innovation (and one they hope to have a patent on, giving it an even big advantage over its competitors).
This w
It is new world bribery and payouts (Score:4, Interesting)
Sorry, Betteridge (Score:2)
No not a tech bubble... (Score:2)
If you have to ask, (Score:2)
then no, it's not.
Re:Bubble (Score:5, Interesting)
Re:Bubble (Score:5, Insightful)
We've been in a bubble economy-wide since the crash of 2007. It's (more or less) intentional, fueled by artificially low interest rates and the Fed pouring money into the banking system. That money has no place to go, so it goes into whatever's trendy at the moment - whether there's real value there or not.
Everyone (again - more or less) agrees that the economy needed the stimulus, but a better approach would have been to pump the money into the economy via smartly targeted (or even non so smartly targeted) direct government spending. Funded, if possible, by new revenue streams themselves defined to have little effect on employment and other economic activity. But we don't have either a functioning market economy or a functioning democracy capable of managing the economy through the political system. So we go from bubble to bubble - or crash to crash, depending on how you view it.
Re:Bubble (Score:5, Insightful)
Re: (Score:3)
Keynesianism is proven to work and austerity is proven not to work, so what's the point here?
Re: (Score:2)
Keynesian economics is based on one-sided math, violates the law of thermodynamics, and associated quantum information dynamics. Essentially the core tenants of Keynesian economics are that bubbles burst and this causes a problem, so keep pushing the economic knobs to keep the bubble going forever. To sustain this you need more credit, more debt, more inflation, and more jobs--and more labor, meaning more people, more output, and more energy consumption. It can't work. Eventually you can't move that muc
Re:Bubble (Score:4, Informative)
What are ascribing to Keynes is exactly the opposite of what Keynes advocated.
The stock crash that heralded the coming of the The Great Depression was created by the policies you criticize -- policies lauded by the Republicans and Wall Street at the time, as a matter of fact.
Keynes observed that when there is significant underutilized productive capacity, there was risk of a deflationary spiral that further disrupts production. Government spending under these circumstances can have a strong positive effect for little dollar cost or risk to long term economic health. It did not take a genius to recognize that when people were starving and shoeless, shoe factories were laying people off, and farmland was left fallow about being repossessed by the bank, a little stimulus can create a lot of useful growth "out of nowhere", without violating any law of thermodynamics. All it took is a little common sense.
The question is whether we have significant underutilized productive capacity in the American economy today. I do not have a strong opinion on that point one way or another.
What I do believe is that a little inflation, by means of monetary hocus pocus or whatever, is probably a good thing when the economy is weak and we were recovery from an asset bubble in housing. That relieves pressure on the housing market, by bringing some homes out from being "underwater". While not glamorous that was probably the right policy to pursue over the last several years. Whether it is worth continuing those policies for much longer is less clear, because the fall off in construction has brought home prices and rental prices roughly in line with the long term historical norms.
Re: (Score:3)
Essentially the core tenants of Keynesian economics are that bubbles burst and this causes a problem, so keep pushing the economic knobs to keep the bubble going forever.
I think the reason it gets such a bad rap is that the people who don't like it don't understand it. Spending stimulates the economy. That is all. The rest is applications of it.
If you personally save money when you have a job for times when you might be without one, then dip into the savings when you are jobless (and yes, this includes retirement), then you are Keynesian. Anyone who saves for retirement follows this economic model. If you plan to work until 2 hours after you are dead (to pay for the f
Re: (Score:2)
If we actually had Keynesianism maybe we could "prove" that it works. Everyone wants to spend money in a recession, but no one wants to stop the spending when the economy starts to turn good again. Hence we get these booms, which inevitably lead to busts.
Re: (Score:2)
Who cares about the theory as long as it works? Macro economics is not based on good theory anyway.
Re: (Score:2)
Who cares about the theory as long as it works? Macro economics is not based on good theory anyway.
Yeah, it's time we at least upgraded to a compiled economics, if not a threading p-code interpreter.
Re: (Score:2)
Re: (Score:3)
Keynesians criticizing other Keynesians for being Keynesians. If you all backed off and shut it and let the damn thing crash, we could get back to having a stable market after we pick the pieces up
That is to suggest we had a stable market prior to the crash? We havn't had a stable market in decades, if by stable you mean few or no bubbles forming and no recessions or stock market crashes.
Higher household debt ratios over the last twenty years as a result of falling wages have meant what was previously just damaging is now becoming catastrophic. The 2008 crash was a lot of things, but one of the things we should have learned was that economic growth cannot be funded from debt. Governments across the w
Re: (Score:2)
Because after every other crash, we picked up the pieces and the market was stable and then there were never any more crashes.
Re: (Score:2)
I think the central problem is that right now there's more money to be made by gambling and speculating than by investing in the real economy. As long as this imbalance isn't fixed nothing is going to change.
Re: (Score:2)
Re: (Score:2)
Everyone (again - more or less) agrees that the economy needed the stimulus
- please exclude me and millions more people from your 'everyone'. No, there shouldn't have been any stimulus, not a cent should have gone from savers into the pockets of failures via the redistribution system set up by the government.
Without effecting employment? (Score:2)
new revenue streams themselves defined to have little effect on employment
How, exactly, do you take money out of the private sector without having a negative effect on employment?
If you have a good answer, you'll be the first person ever to do so.
Re: (Score:2)
I have a theory that we were in a huge bubble that would have had catastrophic consequences ( the airplane crashing into the sea) and that the Fed's actions are trying to reduce the impact of the bubble before they let it blow ( the airplane taking a hard landing over land).
And in the meantime, the smart money, people with political power, and so on are all manipulating the plan. Some of them may even be trying to slow us down so we stay over water longer (so they can get more peanuts before the plane land
Re: (Score:2)
Wait, you think the Fed is trying to deflate the bubble? No no no, that's not how it works at all. The Fed has a more or less explicitly stated goal of buying up the bulk of low risk assets in order to force people into higher risk assets like the stock market, and they're doing it with money printing. The stated goal of all this being employment at any cost. If the jobs that are created are all stupid or useless, no problems. That's the great thing about planned economies - you can artificially manipulate
Re: (Score:2)
My guess is the latter due to Sequestration. Look out the US Government is going to start severe spending cuts which will trickle down to the bubble...
Whoops! They passed spending until September, without further cuts. Guess that shoots a big ol' Fearless Fosdick-size hole in that theory.
Re: (Score:3)
Re: (Score:2)
Government contractor. Incompetence is rewarded.
Re: (Score:2)
AK Marc, he has you there.
But on a serious note, which contractor is this? Knowing which sector it's a part of might give us a clue...knowing the name of the contractor can tell us whether they had a falling out with a congressman on the 'flying submarine' project or perhaps the 'cure for the common cold' project. I kid. But again, give us names, info, or we know nothing. People get fired every day, in public / private, for many reasons.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Is that a pay cut or a reduction in the rate of increase?
Re: (Score:2)
Re: (Score:2)
Hold on there pard, I just upgraded the old desktop machine and bought a new DSLR camera ... I didn't mean to stimulate the economy!
Re: (Score:3)
The seller pays long term capital gains on the purchase price (IP qualifies instantly for LTCG).
The purchasers get to use it as an expense.
Tax avoidance? Do you even understand how taxes work?
Re: (Score:2)
Tax avoidance? Do you even understand how taxes work?
They just write it off! [youtube.com] :)
Re:30 million dollar purchase? (Score:4, Insightful)
People don't get how the truly rich work. They live by a completely different set of rules that even the rich wannabe can't comprehend.
Re:30 million dollar purchase? (Score:4, Interesting)
I gather the way it works in Multinational Corporation Land is that the holding company with the cash is a "subsidiary" that is a PO Box in Ireland that buys a $100,000,000 asset from the USA-based parent company for $30,000,000. The USA-based company then buys the app for $30,000,000 from a third party, sells it to the subsidiary for $1 and claims a $69,999,999 loss to the IRS. The subsidiary then licenses the app back to the parent company for 110% of the revenue generated by the app in a package deal that includes transferring the $100,000,000 asset back to the USA-based company (companies can be tough negotiators with themselves). All the profits are booked in Ireland and the losses in the US and the headline is "USA-Based Company Buys $30,000,000 App." Then again, maybe I just don't understand all this complex business stuff, which is why senior executives make 400X my salary.
Re: (Score:3)
What would happen if you were to try to write off even a few thousand for mysterious "software" that's market value was comparable to existing "free" equivalents?
Assuming all applicable taxes were paid appropriately, nothing happens.
This is somewhat common [wikipedia.org]. A company, based in Ireland or whatever country is cheapest, sells its services to its American parent company. The American company deducts the expense as the cost of doing business, so it avoids large US taxes. The Irish company pays Irish taxes on its income, but since the rate is lower than it would be in the US, less taxes are paid as a whole. The money then sits in the accounts of the Irish company until it
Re: (Score:3)
No, it's not wrong to run divisions in various tax rate locations and include those tax rates in your decision making process.
Re: (Score:3)
Yes, it's avoiding paying taxes. No, it's not tax evasion, and it's not illegal.
it may be legal, but is it wrong?
What's that got to do with it? Companies care about morality and ethics when they have PR value; that's all. If you don't like it, you can complain to your elected reps to close the loophole. Then expect those companies to physically move their ops to Ireland, or get their finance types to find another way around it.
Re: (Score:2)
I assume you mean "wrong" in a moral context, which is a subjective distinction. The American government has determined that it's wrong (according to American society, supposedly) to make businesses pay tax on those expenses. The Irish government has determined that it's wrong to charge a high tax rate on such income.
The only other question is whether it's morally wrong to operate in more than one jurisdiction according to what's most beneficial. So far, I don't think any international body has dared to reg
Re: (Score:3)
I don't care too much, but I think the theoretical problem is this: Makerbot used the open-source community to help popularize their product because it was open source. Now they're switching to closed source, it feels like a betrayal of the people who helped them to get popular.
Like I said, I don't care, but it's a perspective I can understand.
Re:Acquisitions over Taxes (Score:4, Insightful)
It is in their best interest to take advantage of any loophole, just as normal people would go to a tax accountant to get the most money for our tax return. To do otherwise is silly. Do you really pay more taxes than you should?
If there are loopholes in tax laws, then our representatives should fix those. But our representatives don't represent us, they represent the corporations which spend money lobbying. Perhaps the Onion piece about America hiring a lobbyist is what we should do to get some representation...
Re: (Score:2)
Except the product is only the start. (Score:2)
I find it hard to believe that someone at Yahoo couldn't reproduce the same app themselves for a few thousand dollars in development cost
Except that is only part of the problem. Apple App Store and Google Play both have 700,000 Applications, if Yahoo did *another* App even if they marketed the Hell out of it...who would notice. Why would they stop using other Applications that they are familiar with to use yours irrespective of origin. There is a reason why only a few Applications of this type dominate.
Re: (Score:2)
Re: (Score:2)
There's something to this. Corporations are sitting on huge piles of cash. Fixed income investments aren't paying diddly. Governments have huge outstanding debts and a motivation to inflate their way out.
So buy something. Anything*. As long as there is another sucker^H^H^H^H^H^H^Hinvestor in line to buy the asset for more down the line, you'll do fine. As long as you keep a close eye on the price of tulip bulbs.
*As long as you don't give it back to the owners as a dividend.