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Businesses The Almighty Buck

How Snapchat Could March Startups Right Off the Cliff, Lemming-Style 143

Posted by Unknown Lamer from the take-their-money-while-you-still-can dept.
Nerval's Lobster writes "Two investors are Tweeting that Instagram, had it stayed an independent company, could be worth between $5 billion and $15 billion today. That's led to talk of whether Snapchat was right to (reportedly) shoot down Facebook's bid of $3 billion for its business, considering its growth and sizable user base. Snapchat's founders evidently think they can score a better deal within the next few quarters. If they manage to sell their startup a year from now for twice as much, they'll be lauded as extraordinarily smart businessmen—perhaps smarter than the folks at Instagram who sold for a 'measly' $1 billion (and all this despite Snapchat making no revenue). But for other startups in the space, the Snapchat and Instragram stories won't do them much good. Propelled by dreams of ever-increasing millions (perhaps billions!) startup founders could end up turning down perfectly good acquisition offers in favor of continuing to bootstrap — and find their businesses eroding and imploding, as the market for their particular app or service either fades away or (more likely) ends up crowded out by competing software. The startup market is a shark-tank, and most of those who don't get out of the water as soon as possible are eaten, dreams of grandeur or no."
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How Snapchat Could March Startups Right Off the Cliff, Lemming-Style More

How Snapchat Could March Startups Right Off the Cliff, Lemming-Style

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  • Oh, dear. (Score:5, Insightful)

    by Ralph Spoilsport ( 673134 ) on Monday November 18, 2013 @07:55PM (#45459205) Journal
    Business is complex. Making the right decision to sell at the right time to parasitically extract money from the vector capitalists is fraught with peril.

    Headlines from Captain Obvious.

    • Re:Oh, dear. (Score:5, Insightful)

      by Moheeheeko ( 1682914 ) on Monday November 18, 2013 @07:56PM (#45459219)
      "One minute you're up half a million in soybeans and the next, boom, your kids don't go to college and they've repossessed your Bentley." - Louis Winthorpe III

      • Re: (Score:2)

        by bitt3n ( 941736 )

        "One minute you're up half a million in soybeans and the next, boom, your kids don't go to college and they've repossessed your Bentley." - Louis Winthorpe III

        My kid's so dumb, even when I owned Bentley, they still didn't admit him.

      • "One minute you're up half a million in soybeans and the next, boom, your kids don't go to college and they've repossessed your Bentley." - Louis Winthorpe III

        Except that's not the case. If a billionaire loses 999 million, he still have a million dollars in the bank.

    • Re:Oh, dear. (Score:5, Insightful)

      by dkleinsc ( 563838 ) on Monday November 18, 2013 @08:04PM (#45459281) Homepage

      Up to a point, yes. But I'd also factor this in: If I'm a startup founder and am ever in a position to hold $50 million, I could take that, invest it relatively sanely in the stock market, and be living extremely comfortably for the rest of my life. There's such a thing as "enough", and there's no particular reason to press your luck when you already have it.

      • Re:Oh, dear. (Score:5, Insightful)

        by mythosaz ( 572040 ) on Monday November 18, 2013 @08:10PM (#45459307)

        I have a friend that was offered 1M to walk from a business in 1990.

        The only thing the 1M offer convinced him was that it was clearly worth more than 1M, so he held on, and today has nothing.

        Wisdom now is to take your 1M and get some percentage of the future action, so when you're terribly wrong, and it's worth 1B instead, you don't have to kill yourself.

        • Re:Oh, dear. (Score:5, Insightful)

          by paiute ( 550198 ) on Monday November 18, 2013 @08:13PM (#45459327)
          The lesson in most cases is to take the million, walk, then buy back your old company for pennies on the dollar in a couple of years.

          • The lesson in most cases is to take the million, walk, then buy back your old company for pennies on the dollar in a couple of years.

            That needs to be modded up but I got no points today...

          • ... and never look back

            Why would I buy back my old companies even if I can buy them back pennies on the dollar ?

            When I sold my companies, I did not only sell the companies. I sold them what I had created, I sold them the years I have invested in those companies, the ideas that I've put in them, the niche market that they've created

            And if the buyers fucked up the companies that they bought from me, they are already damaged goods - and unlike Michael Dell, I will not buy back the damaged goods, not even for p

        • Re:Oh, dear. (Score:5, Insightful)

          by Sarten-X ( 1102295 ) on Monday November 18, 2013 @08:27PM (#45459421) Homepage

          For perspective, $1 million is like having a $30K salary for 30 years* that you don't have to actually work for, while you can continue to work on other projects or more fun jobs. With a "regular" job that pays the bills, $1 million is a pretty luxurious two-week vacation every year for fifty years. With a healthy retirement plan already in place, $1 million is a decent second home on a lake somewhere, with a savings fund to cover the upkeep. As a point on a résumé, $1 million is a pretty bold statement that you have enough dedication and business sense to get an idea off the ground, and enough creativity to bring good ideas to a prospective employer.

          I'll take the million, thanks.

          * 20 years after taxes, if you won't spend the few thousand dollars to get a good accountant to avoid those.

          • "enough" is not the end goal for these guys... (Score:5, Insightful)

            by schlachter ( 862210 ) on Monday November 18, 2013 @09:12PM (#45459701)

            They are not looking for "enough" money to sip drinks at the beach. They are looking to ride the crazy train and steer it along for as long as they can...and selling out to a company at any amount takes them out of the driver seat. And if the shit really hits the fan and things take a dive, they'll still be able to off load their once $3B company for a couple hundred million which is certainly "enough" in failure mode.

            • Problem is that when it comes to businesses based on eyeballs, things can take a nosedive fast. If interest in SnapChat dwindles slowly, they may still be able to grab a few 100 million. But in the case where there's a competing service crowding them out (a very real risk), it's rather likely that no significant offer will be forthcoming at all.

              • Especially in a business that can be almost completely replicated by a decent programmer and a RackSpace account.

          • Re:Oh, dear. (Score:5, Insightful)

            by able1234au ( 995975 ) on Monday November 18, 2013 @09:32PM (#45459821)

            $1 million at 3% is like having $30,000 for ever

            • Re: (Score:1)

              by Anonymous Coward
              And if you've got $1 million, you should be getting better than 3% on your return.

        • Wisdom now is to take your 1M and get some percentage of the future action, so when you're terribly wrong, and it's worth 1B instead, you don't have to kill yourself.

          Erm, I'm confused. Why is it terrible for a business to succeed 1000x better than originally thought? Why would a millionaire kill themselves due to not having enough money?

      • yes that is the part I don't understand. If they were holding out because they would only be making a small premium on there investment I could understand. But they would be making a massive amount of money leaving them all very rich, why the hell would you hold out for more in such a fickle market as social media where in a few short months they could end up begging to be given a fraction of the original offer. Sure they might get more, but such insane greed makes no sense when they might also get nothing.

        • Re: (Score:2, Funny)

          by Anonymous Coward
          You are right; SnatchChat (damn autocorrect), I mean SnapCunt (damn autocorrect), SNAPCHAT - there, got it right - will be a MySpace in a few years. Sell at the top. Not at the bottom.

        • Re: (Score:2)

          by gl4ss ( 559668 )

          well they would take the money.. knowing that their business has zero revenue.

          BUT they would encourage tweeting about how their product(the company itself) is worth x billion dollars of course.

          and instagram being worth 10 billion ? holy fucking cow no fucking way - or did I miss how instagram was making 500mil+ profit per year? they weren't making that and they wouldn't be making that so how the fuck would it be worth 10 billion dollars?

          if you're being offered more than 10 times what the company profit per

        • Maybe the deal required them to work for their new overlords for 2 years, or relocate the company to Elbonia, or whetever else. It may have been that they got offered the majority of the money as shares in their new overlord, which they thought might tank once the truth of their own organisation became public. Who knows?

          There is also something about believing your own hype. That is, is you started snapchat, you presumably think it's a good idea. Whilst the market may have other ideas, you may not have shift

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        There's such a thing as "enough", and there's no particular reason to press your luck when you already have it.

        This.

        The only viable business plan is to get acquired. In the long run, all businesses go back to zero. Even stalwarts of the Dow - good blue chip names like the American Cotton Oil Company, Pacific Mail Steamship, Studebaker, Bethlehem Steel, Sears Roebuck & Company, and Eastman Kodak, are no longer with us in recognizable form.

        If for some reason it's personally more important to you t

      • Re:Oh, dear. (Score:5, Informative)

        by Jah-Wren Ryel ( 80510 ) on Monday November 18, 2013 @08:36PM (#45459475)

        There's such a thing as "enough", and there's no particular reason to press your luck when you already have it.

        The snapchat founders have been able to monetize their situation such that they've already got at least 10 million in the bank. [cnet.com] That's enough "FU money" to press their luck and ride this thing all the way to the end, glory or otherwise.

      • Re:Oh, dear. (Score:4, Insightful)

        by asmkm22 ( 1902712 ) on Monday November 18, 2013 @09:37PM (#45459845)

        People like that generally aren't driven by the desire for "good enough." What makes sense to you seems trivial to them.

    • Re:Oh, dear. (Score:5, Informative)

      by rudy_wayne ( 414635 ) on Monday November 18, 2013 @08:21PM (#45459387)

      Instagram, had it stayed an independent company, *COULD*could be worth between $5 billion and $15 billion today.

      The important word here is "could". The truth is, Instagram pulled off an amazing scam and they were smart to just go for it.

      -- Instagram takes $50 million from investors and gives them 50% ownership of the company
      -- 3 days later, Instagram, which has 13 employees and zero revenue, agrees to be bought by Facebook for $1 Billion
      -- Investors see their investment go from $50 Million to $500 Million overnight
      -- The founder of Instagram gets half a billion in the process.
      -- PROFIT!!

      What's not to love?

    • In other words: (Score:1)

      by Anonymous Coward

      Two investors are Tweeting that Instagram, had it stayed an independent company, could be worth between $5 billion and $15 billion today.

      Is complete horseshit. It's as valid as saying "If Columbus actually hit Asia, he'd own it."

      Predictions of the future or what-ifs are pointless and moronic.

    • Re:Oh, dear. (Score:5, Funny)

      by retroworks ( 652802 ) on Monday November 18, 2013 @08:27PM (#45459423) Homepage Journal
      Didn't you read the summary??? Two investors sent TWEETS!!!! Case closed.

    • Try not selling.

      You will find yourself outside the offices of the company which you founded and grew without outside capital , screwdriver in hand and an attorney at your side, jimmying open the locks because the investment bankers you tried to fire had the locks changed. Your newly hired comptroller, selected with input from the bankers, will stay on for a few weeks, leaving you a note with "do not try to track me down" in the last line, and he will turn up along with the majority of your employees in a fi

  • Le Pop! (Score:4, Interesting)

    by bob_super ( 3391281 ) on Monday November 18, 2013 @07:59PM (#45459235)

    Remind which which date we have agreed on for that bubble to pop?

  • Lemming-Style... (Score:5, Funny)

    by Hsien-Ko ( 1090623 ) on Monday November 18, 2013 @08:00PM (#45459241)
    You mean like programmed by a bunch of Scots and saturated ports of other platforms taking the world by storm eventually being bought up by a larger entity to rot on with half-assed iterations through third-party developers?

  • frat bro's (Score:5, Insightful)

    by globaljustin ( 574257 ) on Monday November 18, 2013 @08:01PM (#45459245) Journal

    Snapchat was made by frat bro's who royally screwed the guy who did all the real work. [gawker.com]

    A *real* tech thought it up and made it, then his rich friends stole his idea...

    An idea for a way for people to send drunk videos to each other w/o consequences, which the frat-bro's took to the logical place they would, which is to drunken college girls...

    **that's Snapchat**

    Facebook.com offered $3Billion b/c facebook.com is *hemoragging* young users & it will do anything to buy other system's users (ex: Instagram) for them to vampire the life force from for advertising profit

    that's it: facebook.com wants to buy Snapchat's users

    all the noise about 'IPO valuation' is absolutely standard issue tech-bubble startup stuff that **we all know** how the cycle goes!

    snapchat is only good as long as drunken hotties use it to send consequence free drunk selfie videos

    • It's not rich frat bros using their money to push out the real developer, that's not what's being argued. The two central developers presented and developed the program for a class at Stanford University. The third guy (from the same frat) is arguing that he had a hand in further development, and that he came up with the old name of the business that's no longer in use. Whether that entitles him to a third of the business is a legal matter that relies on what contracts were signed or agreements were made

      • it's all on the link I provided...

        the guy invented the app

        the two frat-bro's class project doesn't mean shit...for my MS in Information & Communication Science I made proposals and projects for all kinds of app concepts...doesn't mean I can sue anyone

        in court these things become pretty black and white...at least when there are text messages that say it literally word for word ;)

  • SnapChat founders are idiots. (Score:5, Insightful)

    by RightSaidFred99 ( 874576 ) on Monday November 18, 2013 @08:02PM (#45459259)

    If Facebook offered them that much money, they are complete nimrods to turn it down.

    Maybe they didn't think that the alternative is Facebook (and maybe others) dropping a cool $1B on a similar app of their own that better integrates with existing social platforms. Wonder how much their company will be worth then?

    Idiocy. Greed and idiocy. Will be hilarious if they can't even sell for $0.5B in 6 months.

    • Re: (Score:2)

      by khallow ( 566160 )
      Apparently, it was an all-cash offer too. I thought it might be a Facebook stock offering that could be worth far, far less by the time they would be allowed to sell the stock. Well, it'll be interesting to see what happens down the road.

    • Re: (Score:2)

      by geekoid ( 135745 )

      Facebook got a huge amount of data for their users, and NON USERS of facebook.
      They got demographics, usage states, increased traffic.
      This was a good move for facebook.

    • Re: (Score:2)

      by hsmith ( 818216 )
      I have a feeling they will go the way of Groupon.

    • Re: (Score:3, Insightful)

      by Seumas ( 6865 )

      Instagram and Snapchat are two examples of how there is no such thing as a stupid internet idea. Or, rather, there are plenty of stupid internet ideas, but they'll make billions anyway.

  • Overvalued? (Score:3)

    by lymond01 ( 314120 ) on Monday November 18, 2013 @08:07PM (#45459293)

    I'd like to see the numbers on ad revenue/data selling revenue for these services. I have a hard time believing that instagram, with its miniature, completely ignorable ads, would ever truly be worth $5 billion. This is what is terrible about "value" these days -- it is turbulent. Houses are bouncing back -- our house gained $100K in one year. Do I think it's worth that much? Not at all...but a lot of people do, so there it goes for no other reason than many people think it should be worth more. Price of wood, stucco, tile hasn't gone up 50% that I know of...

    I suppose it's not advertisement so much as selling the information from the userbase to other clients. Those are the dollar amounts I'd like to see -- not so much what ads are directly bringing in, but what other companies are buying access to. "Hmm...Instagram user ou812 has a linked Facebook account under David Lee Roth with lots of pictures of banjos, cows, and hair replacement techniques. We can sell his info to [insert companies here] for $X."

    Or something.

    • Re: (Score:2)

      by mckwant ( 65143 )

      Real Estate: I don't have anything to back this up, but lots of real estate markets have been blowing up. My neighborhood is up about 20% year on year, but we've seen a lot of rentals cropping up. My guess is that either REITs or well-heeled investors are buying loads of houses at the low end and renting them out. Rent ~= mortgage payment, so you're just out the maintenance and handling, if that, and you're gaining equity.

      If you go onesie - twosie, and one goes vacant for a few months, that nukes a lot

  • Years #1 morons. (Score:2, Funny)

    by Anonymous Coward

    Snapchat founders are the years stupidest people. By a wide margin.

    3 billion. for a stupid chat program... 3 billion!

    You turned down 3 billion. Your program makes nothing. 3 billion for nothing.

    Thats the ultimate great deal. And you said no...

    Now line up so we can slap you. 3 billion times.

  • Why is SnapChat even a thing? (Score:4, Insightful)

    by GoodNewsJimDotCom ( 2244874 ) on Monday November 18, 2013 @08:12PM (#45459321)
    Snapchat should have sold. The entire idea should die to hackers making a buck when Snapchat becomes big. Can't someone make a hack to permanently store the data? Outside of a little encryption breaking, it shouldn't be that hard to do. And I'm sure there are ways to dodge encryption breaking even if you'd have to go a hardware button where when you press it, the video memory gets saved.
    • Okay, the hardware idea is bad for a major vector. I was just had another thought,"Aren't decompilers pretty common now? If you decompile an ap, you'd have access to all their encryption functions right there. All you'd need to do is isolate where it is painted on a screen, write a function called to save that data. Voila, you have a snapchat client that can save all the data. I bet people have aps that do this right now because it sounds so simple to do.
      • You're making this too difficult. There are numerous apps to store SnapChat messages in the Play store. I imagine the same is true for other platforms. All you need to do is a screen grab. Don't bother with encryption functions, etc. Your client has all that to show you the original message. Just take a screen grab before it disappears.

        Is there some crazy patent that SnapChat has? Why again couldn't Facebook or anyone else build "self-destructing" messages for well less than $3 billion?

        • As has been pointed out, Facebook doesn't want the software, the want the victims^Husers.

          Whether several million drunk college students are worth billions of dollars is another deep and unanswerable question.

          • Re: (Score:2)

            by fatphil ( 181876 )
            Well, they are demonstrably willing to part with their money, and foolishly at that - what's not to like about a market segment like that? (in the short term, at least)

    • " Can't someone make a hack to permanently store the data?"

      yeah...its called using the screenshot function of your phone to capture the pic while its there.

    • Comment removed based on user account deletion

    • Re: (Score:2)

      by MacDork ( 560499 )

      http://forum.xda-developers.com/showthread.php?t=2183526 [xda-developers.com]

      .nomedia herp derp. They only ever delete the videos, probably because of size. Pics stay forever afaik. Totally haxor proof. Now we just need someone to publish a "Snapchat girls gone wild" video. That should make the producer lots of cash and drive a stake through the heart of snapchat at the same time. Then I don't have to hear stories about VCs masturbating themselves over snapchat.

  • Boss had a web site (silly little news aggregation thing).

    Somebody offered him 12 million for it. He turned it down.

    Now it isn't even on line and Boss is working for a salary somewhere.

    Lesson: Take the bird in the hand.

    • The question is when do you take the offer, when you dont have hindsight. What happens when he is offered 100k, then 1m, then 10m, then zero. If you take offer one and two you are stupid but if you dont take offer 3 then you are stupid. Hindsight makes it all easier.

      • My rule of thumb in selling ideas/patents/business seeds has been to sell out when the offer is 5X the money/time I put into it, at my normal consulting rate. If I put 50K into a patent - in direct costs and time - and someone offers me 250K for it, I take it. Yes, they make take it to $1+ million, but I've already got 5 times the value out of it - a fairly healthy return!

        • This is too low for VCs. They expect a higher multiple. If the failure rate is 90% then a 5x payoff will lose you money.

          • Which is why I'm not a VC. I fund and develop my own things...

            • Sure. understood, but if the odds of failure are the same, nine out of ten, then the same rule applies. My point is that people are complaining about people expecting ten times their money but if they fail nine times out of ten, then they are just breaking even. I know plenty of people who lost everything in a startup.

              • Sure. Although in this case I doubt the initial funders spent anywhere near $300 million building snapchat. And if they have, then they really are doubly-confirmed as idiots - one for spending SO MUCH on development of an app with no business plan to monetize, and two for turning down $3 billion dollars!

          • Re: (Score:2)

            by fatphil ( 181876 )
            But as someone wants to buy it, it's not a failure. So the failure rate is 0%.

            Parity payoff is parity.

            • True. i know i was playing roulette wrong. i should only put on winning numbers.

              The payoff from this one for the VCs has to underwrite the losses you never hear of.

              • Re: (Score:2)

                by fatphil ( 181876 )
                Absolutely. And of course, not all 10x returns, or 1x losses, are equal in magnitude, either.

      • You sell when either (a) you feel the price is indicative of the value or (b) you have enough to retire and spend your days working (or not working) on whatever the fuck you feel like. And, for the record, it's the lower of those two values you should accept. That's where the snapchat folks failed.

        If you really feel that it's only worth 100k, sign the contract. If it's "worth" $100k, then going from 100k-$1M-$10M takes resources - probably resources you don't have. OTOH, if you see rapid, perpetuating growt

  • Maybe the market is tired of this type of startup? (Score:5, Insightful)

    by mlts ( 1038732 ) * on Monday November 18, 2013 @08:15PM (#45459345)

    We have gone through a first round of startups which were actually pioneering, back in the dot com days.

    The next boom are startups which really don't offer much in the way of breaking ground. What they offer is the fact that their customers and their product are totally different groups. FB, Twitter, SnapChat, and many more follow this model.

    The problem is that there is only so much money advertisers will pay, and only so much data they can squeeze out of their subscribers before they give the middle finger and move on. This is a bubble waiting to happen, because long-term, there isn't really any product, and their services are essentially fungible. Someone else can come out with a virtually identical service and wrest the userbase away, just like Facebook wrested MySpace's userbase away.

    I can understand why people invest in these companies on the short term, but long term, what product do they have over time? Cable at least has fiber in the ground guaranteeing they will be around. Same with wireless providers and spectrum.

    • Re: (Score:2)

      by g01d4 ( 888748 )

      only so much money advertisers will pay

      You'd think there would be some estimate of the advertising pie and how much thinner the slices get when coming up with a valuation for companies following this model. You'd think.

      • Re: (Score:2)

        by mlts ( 1038732 ) *

        What I see that counteracts the thinner slices is the fact that advertisers keep offering to give more and more data out, from tracking mouseovers to intercepting E-mail, to supercookies, and other permanent identifiers.

        However, there is only so much people will take, especially if the info sold causes negative consequences to people, and that is when the ad-based ecosystem will start hitting the skids. That, and when there is no more to sell to advertisers, after the cameras are turned on, and the subscri

  • Those that don't learn from history... (Score:5, Informative)

    by hirschma ( 187820 ) on Monday November 18, 2013 @08:16PM (#45459349)

    The original "but we're worth so much more than they're offering" dot.com story...

    http://en.wikipedia.org/wiki/PointCast_(dotcom) [wikipedia.org]

    How many have their been since?

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      The original "but we're worth so much more than they're offering" dot.com story...

      http://en.wikipedia.org/wiki/PointCast_(dotcom) [wikipedia.org]

      How many have their been since?

      Hell, There's Apple and Be, Inc.

      Back in the mid 90's, MacOS (Classic) was on its last legs and Apple was shopping around. One of the things they considered was purchasing Be, Inc., for BeOS (which was created by former Apple exec Jean-Louis Gassee).

      Apple offered Be about $300M or so for it. Gassee, seeing that Apple was "desperate" and really wanted

  • Making change (Score:4, Insightful)

    by TheloniousToady ( 3343045 ) on Monday November 18, 2013 @08:16PM (#45459351)

    They'll be lauded as extraordinarily smart businessmen—perhaps smarter than the folks at Instagram who sold for a 'measly' $1 billion (and all this despite Snapchat making no revenue)

    This billions-for-no-revenue thing reminds me of "The Change Bank" commercial that appeared on Saturday Night Live years ago:

    A lot of people don't realize that change is a two-way street. You can come in with sixteen quarters, eight dimes, and four nickels - we can give you a five-dollar bill. Or we can give you five singles. Or two singles, eight quarters, and ten dimes. You'd be amazed at the variety of the options you have....All the time, our customers ask us, "How do you make money doing this?" The answer is simple: Volume. That's what we do.

  • Oh no!

    *pop*

    Or as I used to end up doing...

    *pop**pop**pop**pop**pppooopoooppppppppppppppp [Amiga stutters]

  • It's the investors (who can afford to lose a few million) who are pushing to hold out. Their risk is "low" compared to the potential upside in this decision. To them holding out is good. For the founders, it's an idiotic move. But they probably don't control this decision at this point.
  • Google tried to buy Friendster for $30 Million in 2003 and it was turned down. We all know what happened to Friendster not even 2 years later. At the end of the day you need to just use your better judgement and evaluate where you think the company is heading in the future. Although I fail to see how accepting a one billion offer on a company is a failure.

    • Re: (Score:2)

      by geekoid ( 135745 )

      IN short, some risk in business don't pay off.
      The kind of people saying they would jump at the first offer are the same kind of people who would be to afraid to get away from the salary test to start their own business.

      • The kind of people saying they would jump at the first offer are the same kind of people who would be to afraid to get away from the salary test to start their own business.

        Yeah, it's not at all possible that they:
        a) reckon it's as good an offer as they're likely to get
        b) realise that they don't have the skills to take it to the next level
        c) reason that it's enough to retire, and go "sod it,where do I sign?"

        You should go back to DeVry - I'm sure they'd love a distinguished and eloquent alumnus teaching on t

  • i only wish microsoft had bought bookface instead.

  • How many photo sharing apps do smart phones need? Remember what happened the last time we saw insane valuations for silly companies like this?

  • Lemmings Don't Commit Suicide (Score:3)

    by rubycodez ( 864176 ) on Monday November 18, 2013 @10:43PM (#45460175)

    Lemmings don't commit suicide by cliff or any other means, Disney actually rigged up a turntable to fling them off cliff for their "documentary" White Wilderness

    • Re: (Score:1)

      by Anonymous Coward

      Disney actually rigged up a turntable to fling them off cliff for their "documentary" White Wilderness

      I kind of like the image of a turntable to fling stupid start-ups off a cliff...

  • How much revenue does Instragram generate? How is it that modern business "investors" have lost any inkling of a connection between revenue generation and enterprise value?

  • If I may go off on a tangent here; companies beign bought for billions, even though they don't make a profit - isn't that what has been behind all bubbles in the market? I wonder if it wouldn't be better to simply round up all venture capitalists, confiscate their ill-gooten money and shoot them. They are more than a bit like a disease; they infect the market, suck out the value and then let the host die, and like all parasites, they don't understand or care that it is going to kill most of them in the end.

  • Coulda woulda shoulda. Or: duh (Score:3)

    by wonkey_monkey ( 2592601 ) on Tuesday November 19, 2013 @08:22AM (#45462145) Homepage

    Two investors

    Wow, two! One might just be a crazy person, but two? This I gotta see.

    are Tweeting that Instagram, had it stayed an independent company, could be worth between $5 billion and $15 billion today.

    Or it could be worth nothing. Or monkeys could fly out of my butt.

    considering how its growth and sizable user base.

    I think you accidentally a verb.

    Propelled by dreams of ever-increasing millions (perhaps billions!) startup founders could end up turning down perfectly good acquisition offers in favor of continuing to bootstrap — and find their businesses eroding and imploding, as the market for their particular app or service either fades away

    So what you're saying is, business is risky? Prices may go down as well as up? Terms and conditions apply?

    Well, no shit.

  • ... lemmings don't actually do that. A great deal of the impetus for the belief that they do comes from an old Disney documentary where they herded the unfortunate animals off cliffs for the photo-op.
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  • If the $2 billion offer was 75% cash and 25% options and the $5billion offer was 25% cash and 75% options, the $2bil offer may have been better. Especially if the options tank. That's the risk I guess.

    Heck, $1bil is nothing to laugh at anyway. 10000x more than my salary.

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