Tinder has caned their CEO/Founder
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@Intercourse said:
Facebook's purchase of Instagram. What did they gain by that? How did they come up with the valuation? They paid $1B
They took advantage of their own overinflated stock while they could. Why not? That "$1B" isn't what Instagram was worth, and isn't what Facebook paid. It's an entirely meaningless number.
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They took advantage of their own overinflated stock while they could. Why not? That "$1B" isn't what Instagram was worth, and isn't what Facebook paid. It's an entirely meaningless number.
Wrong. It does not matter what you are using as your unit of measure. Measure it in USD, measure it in the value of rubber tires, measure it in the value of lbs of coffee, measure it in the value of barrels of oil. I don't care. The valuation at the time was $500M, which I still think was fucking retarded. Realistic value, for someone besides Facebook would have been $30M-$60M. For FB, it was worth whatever it would have cost them to replicate the functionality on their own platform, which is likely a couple of million at most.
So, use the spot price on whatever fucking commodity you want to value it at, they overpaid. And it is an entirely meaningful number, because a good portion of that was paid to the founders of Instagram. Which means it had the potential to leave FB and definitely diluted their public voting rights.
So yes, it does matter and it is NOT a meaningless number. All purchase prices carry implications and costs and none of them are meaningless.
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@Intercourse said:
For FB, it was worth whatever it would have cost them to replicate the functionality on their own platform
Google plus lol
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Google plus lol
Touché, but not really an accurate comparison. The people who used Instagram were already users of Facebook. Most of those pictures ended up posted on Facebook anyway. They were concurrent users of each platform. If Facebook had come out with their own version, integrated in to their platform, people would have used it. They were not trying to attract new users, the user base probably had a near 100% overlap. They just needed to extend the functionality to post filtered photos of hipster lunches to their own platform and it would have been done.
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@Intercourse said:
They were not trying to attract new users, the user base probably had a near 100% overlap.
Or another way you can look at this was that the same users Facebook was trying to engage, to get them scrolling their facebook feeds reading facebook ads, were choosing to spend time on instagram instead.
And I disagree that a facebook version of instagram would have been a sure thing. Instagram was already well established by the time facebook was interested in them, and even if facebook could have got some users migrated back over to ‘the feed’, I'm pretty sure the bulk of people would have stayed at instagram either just out of inertia, or as some kind of low-cost rebellion.
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That point is moot. The only reason I brought that up is that it would get the highest valuation. If you are worrying about advertising to people, keeping 30M people on your site instead of Instagram is still a long way to get to a $1B price. No matter how you look at it, they absolutely pissed away money.
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The problem is that if Facebook came out with their own version, users of both systems would still have to choose between one or both, but not have one choice.
When it comes to this acquisition, not only did they get a highly-recognized name, but they eliminated a potential competitor.
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The problem is that if Facebook came out with their own version, users of both systems would still have to choose between one or both, but not have one choice.
I see your point, but the vast majority of people posted those photos to Facebook anyway. If Facebook had come out with their own version, Instagram's market would have likely dried up quickly. There was nothing magic about their app, it just added filters to photos.
When it comes to this acquisition, not only did they get a highly-recognized name, but they eliminated a potential competitor.
I truly believe that if they had developed their own app in their platform, Instagram's market would have been eliminated because of the concurrency of users. I see this as nonpoint.
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@Intercourse said:
I truly believe that if they had developed their own app in their platform, Instagram's market would have been eliminated because of the concurrency of users. I see this as nonpoint.
I believe that the acquisition removes all doubt. If you are a Facebook user, if you are an Instagram user, or if you use both, you are technically a Facebook user.
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Fair enough, but that still brings us back to "Was the price paid fair, or fucking ludicrous?"
I say ludicrous. I say shit like this inflates bubbles. Is it worth $1B to remove choice from your users with regards to how they post stupid photos of shitty lunches? I say no.
That does not mean we cannot have different opinions. My opinion on such a matter would always start with, "Does it make money?" In this case the answer is no, so I am highly unlikely to be swayed.
To be fair though, my bankroll is just slightly smaller than Zuckerburg's, so WTF do I know? ;)
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Oh, I don't think that there's a doubt that it was ludicrous.
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Everyone seems to want to discuss whether or not a property should be purchased. I am not talking about that. I am only concerned with price paid for acquisition. ;)
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ludicrous
*Ludacris
@Intercourse said:
I am only concerned with price paid for acquisition.
I think that we haven't yet got a good understanding of the monopoly effect of social networks. So, there definitely is a bubble, in the sense that prices are getting out of hand, but on the other hand, if facebook manages to gain an effective monopoly on the social graph, where anybody without a facebook account is missing out on a big portion of online life, or if IAC basically gets a chokehold on the dating market, that could turn out to be worth even more than anybody imagined.
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if facebook manages to gain an effective monopoly on the social graph, where anybody without a facebook account is missing out on a big portion of online life
That is looking to be very unlikely. Trend lines on the subject are showing otherwise. People are leaving FB in droves. Currently, their expansion in to expanding markets is keeping their numbers up and in positive growth, but if you look at areas where they started (the US) it seems like they are now on the bad side of market saturation.
The thing is, I will readily admit, we are at the point now that these conjectures (I use larger, more complex words when I drink...) are purely speculation. Anecdotally, I know tons of people who have left Facebook. One thing is for certain, Facebook marketing has been proven to be largely ineffective. Facebook has also positioned themselves to he at odds with content creators. Content creators are why people go there, but they have attempted to make money off of that through "promoted posts" and that is driving content creators away. They are making a lot of missteps on this front and it has to bite them in the ass at some point.
Google has done an excellent job of aligning interests between content creators and advertisers. Facebook could stand to take a few lessons from their model on Youtube and Blogspot. Pay the content creators! They are the reason that people come to your fucking site in the first place!
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and this is why my account is deactivated on FB. the only reason i didn;t delete right away (i have an outlook reminder to do that) is so my friends would have a chance to ee my kissoff post before i don't exit anymore. on FB
you can still find me on G+ for now.
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Conversely, I use smaller words when I drink, and fall asleep in the middle
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Conversely, I use smaller words when I drink, and fall asleep in the middle
I think that is the normal. I guess I had to eschew the prevalent.
Ever watch "Justified"? There was a line in there where one character says to the other, "That's you Boyd, always using a $40 word when a $4 would do just fine." When my wife heard that she said, "That is you when you drink."
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"Now, Rayland..."
That's how Boyd pronounces it, I know that it's spelled Raylan
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I absolutely love the dialog in that show. The story is good also, but the dialog is perfect.
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Everyone has the "I'm sick of dealing with this shit" tone. Raylan, Boyd, even Wynn Duffy.
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Roughly paraphrased:
"Do you want a drink? I am having one."
-Rayland grabs a bottle of Buffalo Trace-
"It's 10AM."
"It's been a rough morning."
"Well, I guess seeing as it is my whiskey, I will have one with you."
-Rayland drinks both-
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That's why I've got
?sk=h_chrappended to all of the links I go to facebook through—it sorts the feed chronologically, rather than showing ‘top stories’. Obviously, I realize that I'm still basically trusting that facebook is doing what it says with that, all I know is that a) I still see plenty of stuff on my facebook page that I don't agree with. b) I never get “did you see that thing I posted to facebook”, and not know what the person is talking about.I guess what I mean is that I sincerely believe that using chronological sort improved my facebook experience, and I wholeheartedly recommend it.
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With how poorly Facebook is working lately (not getting notifications if a few people post quickly), I'm probably going to deactivate my account once my wife gets back from vacation.
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What.thedailyWTF.com is working better for me than Facebook ever was.
that is the real WTF
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I thought that "node.js Maine" would be enough to find you on G+.
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was it?
i've posted links to photos on G+ before. you can find them around. i think the easiest one to find is the so i did a thing on amazon thread, but theres also the picture i posted in the likes thread today.
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I'm not that dedicated to G+, I think tonight was the first time that I've been on there in 2 years.
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neither am I apparently. I'm just looking through my profile and it pretty barren. like nothing there at all!
basically pictures of things i've shared here, some privately shared rants about a professor i hated at school when i was there and some more privately shared python code that i have no memory of writing. but must have.
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That describes all of my Python code.
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what was i writing that required that and why did i share it on G+?
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Infinite derping, hopefully.
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NFC. maybe.
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As a Pats fan, I root for the AFC.
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NFC = Near Field Communiations
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What money? Stock isn't money.
You could have been a CEO of a dot-com entity, you would have fit right in.
As I said, pick your method of exchange for value or capital. It does not fucking matter if it is US dollars, barrels of crude or bottles of Johnny Walker black. You are still exchanging value. Value is money, money is value. Whether it is the barter system or a debit card, value is still being transferred.
Our currency, what you conventionally think of as "money" is at its root a worthless slip of paper or an entry in a database somewhere. The only thing that gives curency value is the fact that you can exchange it for something. Can you exchange stock for something?
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@Intercourse said:
It does not fucking matter if it is US dollars, barrels of crude or bottles of Johnny Walker black. You are still exchanging value. Value is money, money is value.
Basically, I agree with you, monetary value of a firm should be based on some tangible way to make a profit.
But.
You're running into the assumptions that lie behind the Dismal Science of economics.
When you or I buy and sell a few hundred or thousand of something that's there millions of what you're saying works fine.
There's only one FB. (Nearly true.)
It may not actually be possible for FB (or it's owners) to sell $1B worth of shares to get $1B to buy Instagram, while it entirely possible to swap shares that are notionally worth $1B for the ownership of Instagram.
Think of when you play Monopoly and one opponent desperately needs that one deed to complete his only possible block. The dollar value is different to different players - and value of various trade possibilities can be all over the map...(or board ;))
Dollars vs. actual value may not be a linear function.
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You're running into the assumptions that lie behind the Dismal Science of economics.
When you or I buy and sell a few hundred or thousand of something that's there millions of what you're saying works fine.
There's only one FB. (Nearly true.)
It may not actually be possible for FB (or it's owners) to sell $1B worth of shares to get $1B to buy Instagram, while it entirely possible to swap shares that are notionally worth $1B for the ownership of Instagram.
You are missing the basic tenets of the economics you quoted. When you swap stock, at least part of it is leaving your control. That stock represents equity and voting powers. No matter what, value has been transferred. Scarcity is diluted drastically when you go releasing $1B worth of stock in to the free market, you have the potential to do more than $1B worth of damage.
Dollars vs. actual value may not be a linear function.
No, it absolutely is. Value equals money, money equals value. What you are saying is essentially:
Apples vs. apples may not be a linear function.
I get what you intended though. And I agree with it in principle. A good or service is worth what someone will pay for it. I absolutely agree with that. That does not mean that I do not think a person is fucking stupid to overpay for something.
Spot prices are not always indicative of actual value. If I decide to buy a Yugo for $150K, that does not mean it is worth that. Just that I was stupid enough to spend $150K for something and piss money away.
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@Intercourse said:
I get what you intended though. And I agree with it in principle. A good or service is worth what someone will pay for it. I absolutely agree with that. That does not mean that I do not think a person is fucking stupid to overpay for something.
Spot prices are not always indicative of actual value. If I decide to buy a Yugo for $150K, that does not mean it is worth that. Just that I was stupid enough to spend $150K for something and piss money away.
What I'm also trying to get at is that there are also particular and possibly peculiar mechanics behind large transactions that distort or ignore the ordinary (spot market) value of things.
From memory:
My favorite example is a guy who found shares of one the defunct Northeast railroads lying around in an OTC market and bought them for pennies. Turned out the legislation and transaction to create Conrail just happened to require his shares...
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Doesn't FB have one of these strange voting structures where the founders can basically outvote everyone else with only a tiny fraction of the shares? If that's true (and I think it is) even that staggering value of shares may well not convey much control (or conversely might be satisfied with fewer shares than expected).
As an ordinary investor, I would never willingly invest in a company that did such shenanigans with their share structure; I'd feel like I'd get squished too easily by the whim of the board chasing something I had no knowledge of. (I might contemplate buying their bonds though, but would consult an expert first.)
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Doesn't FB have one of these strange voting structures where the founders can basically outvote everyone else with only a tiny fraction of the shares? If that's true (and I think it is) even that staggering value of shares may well not convey much control (or conversely might be satisfied with fewer shares than expected).
As an ordinary investor, I would never willingly invest in a company that did such shenanigans with their share structure; I'd feel like I'd get squished too easily by the whim of the board chasing something I had no knowledge of. (I might contemplate buying their bonds though, but would consult an expert first.)
Most corporations have some variation on this. For more on the subject, research common stock vs. preferred stock. Preferred stock usually has more votes per share than common stock. In situations like FB, where the founder is still a large part of the corporation, it is very common for preferred stock voting rights to far outweigh those of common stock.
As for worries about the board doing something you might not approve of, that is tough luck. The board also typically has preferred stock and although they should consider the interests of the shareholders when making their decisions, their greater responsibility is to the health of the company because without that, your concerns matter fuck-all.
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@Intercourse said:
Most corporations have some variation on this.
Not in the UK, they don't. It's very rare here. A similar effect can be had by just having large numbers of shares — founders remain powerful voices when they choose to — but then at least the holdings are theoretically easier to subdivide.
It's one of these things where practice diverges on the two sides of the pond.
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@Intercourse said:
Preferred stock usually has more votes per share than common stock.
I thought it was more the other way around. Preferred stock often didn't have a vote at all (except for in special cases) but was in line between debt and common equity in case of bankruptcy.
Yep:
Preferred stock - Wikipedia