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Is this the second Dot.com bubble?

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Re: Is this the second Dot.com bubble?

Postby tomthorne » 10 Apr 2012, 13:55

cfimages wrote:
Companies and individuals pay to serve ads at the side of the screen. That's how they (FB) make their money.


Oh yeah, plus that :oops:
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Re: Is this the second Dot.com bubble?

Postby GuyInTaiwan » 10 Apr 2012, 14:04

Okay, but again, maybe this is where I am different to most people.

If they sell data, it's presumably for marketing purposes. If they have an ad on a site, it's presumably for marketing purposes. Yet if a person (including some family members, friends of friends, etc.) sends me an unsolicited email, it goes straight in the trash folder. I get dozens of unsolicited emails per day and they all go straight in the trash folder. I can't remember the last time I clicked an ad on a website and actually bought something that I hadn't already set out to buy.

I still don't really get their business model. It seems like smoke and mirrors to me.
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Re: Is this the second Dot.com bubble?

Postby tomthorne » 10 Apr 2012, 14:12

GuyInTaiwan wrote:
I still don't really get their business model. It seems like smoke and mirrors to me.


But they make a big profit. $4 billion a year or something (I may be wrong about this figure, but it's in my memory for some reason :) ).

EDIT: That's revenue. Profit is 1 billion.
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Re: Is this the second Dot.com bubble?

Postby StuartCa » 10 Apr 2012, 14:13

it's in part, the same business model as TV, radio or press. You watch the ad the product stays in your mind. next time you're looking for that type of product you'll remember that ad and that product. the added dimension is the click through which takes you to the promotion page of the website. TV companies are valued in much the same way ie It costs more more to advertise during the most popular programs.
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Re: Is this the second Dot.com bubble?

Postby jdsmith » 10 Apr 2012, 14:15

headhonchoII wrote:That's what I read aswell. Still spending 1 billion USD like that points to a tremendous waste of money. Avoid buying their shares. All these companies are heading for a fall...Facebook, Zynga, Groupon. To my mind Google and Microsoft are still going to be a good bet long-term.

I bought some Zillow for fun, and I think it is one of the new dot.coms and I don't think it will crash into bits.
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Re: Is this the second Dot.com bubble?

Postby headhonchoII » 10 Apr 2012, 14:19

It's about value in the end. I don't see the valuations matching the value generated. They have value but not THAT much value. Most of the business models do not have a high enough threshhold so they can be overturned quickly. They are not diversified or rooted in the real world enough. Google is a great company because it has it's hands in everything, geolocating, server farms, automobiles, search, mobile, hardware. That's also why I like Amazon, a great mix of real world and online.
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Re: Is this the second Dot.com bubble?

Postby Adam_CLO » 10 Apr 2012, 14:31

headhonchoII wrote:Google is a great company because it has it's hands in everything, geolocating, server farms, automobiles, search, mobile, hardware.

Yes, they have their hands in everything. But at the end of the day, they make 95% of their money out of one thing. Search.

They are looking to diversify into other areas like social media, mobile, hardware etc. They are just throwing money everywhere and seeing what sticks. So far they haven't found it.

Microsoft has the same problem. It makes the vast majority of its money from two products - Windows and Office. Yet they are throwing money everywhere into mobile, search, browsers, video games etc. hoping to find another platform to make money from. But they haven't found it either.
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Re: Is this the second Dot.com bubble?

Postby headhonchoII » 10 Apr 2012, 14:59

I agree with you but only up to a point. Microsoft is quite diversified as to it's revenue base (business and consumer) although 75% still comes from Windows and Office.
http://www.tannerhelland.com/2962/where ... oney-2010/

Google's push into Mobile already brings the same amount of revenue as Facebook makes from all it's ads, even though it is only 10% of their total revenue. My guess is they also have massively valuable IP rights in various sectors. Whether intentional or not free Android apps have proven to be a huge money spinner for them.

http://www.eweek.com/c/a/Mobile-and-Wir ... er-727452/
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Re: Is this the second Dot.com bubble?

Postby GuyInTaiwan » 10 Apr 2012, 15:10

People must be doing some serious ad clicking then. Wow. I didn't realise how compulsive people are. How much do they get per click?
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Re: Is this the second Dot.com bubble?

Postby tomthorne » 10 Apr 2012, 15:21

GuyInTaiwan wrote:People must be doing some serious ad clicking then. Wow. I didn't realise how compulsive people are. How much do they get per click?


Zuckerberg is on record calling Facebook users "dumb fucks".
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