Is this the second Dot.com bubble?

[Belgian Pie]

Wow, FB has a 'Chief Lobbyist'!

[Charlie Phillips]

A lot of this technology is still pretty dumb. I go on facebook and it figures I'm in Taiwan so it shows ads in Chinese. I don't know what the fuck it's going on about. Google tracks me too. I bought a new webhosting service recently, so everywhere I go, google serves me ads about that web hosting company. I've already bought that product daaaah....

So with the new face recognition data mining company, I'll walk down the street, buy a Rolex and forevermore be served with Rolex ads....dum dum da da da, da ben dun.

100 billion dollars, my arse.

[headhonchoII]

I know Charlie, the whole I buy something because my friend likes it is WAY over hyped too.
The oft quoted valuation of Facebook is a lazy extrapolation of their IPO stock value, journos generally being a bit thick.

I just think that Facebook should have paid 10 million USD for the successful app company , not 1 billion USD. What poor negotiators, smacks of desperation actually. If they gave me a chance to negotiate I would have saved them 100 of millions of dollars. What, don't like my offer? Here is our new service called 'telephoto' , it's launching in two weeks.

[GuyInTaiwan]

I have no doubt that massive amounts of information about me have already been gathered.It's still useless to anyone else unless they can actually use it to their benefit (i.e. actually sell me something). I generally don't buy things unless I need them, and I use most things until they're no longer functional. So, if someone found out that I bought a pair of hiking boots, for instance, they'd be shit out of luck bombarding me with ads for hiking boots because I wouldn't even be thinking about buying hiking boots for several years afterwards. They might try to sell me other hiking equipment, for instance, but again, I'm not going to go out and buy a tent. I already have a tent. I already have a backpack. I already have pretty much whatever I need to engage in that activity.

A couple of years ago, I met a woman who had studied fashion. She told me that the average garment is worn seven times. I don't know how true that is, but let's assume it is. I must be so many standard deviations away from the norm that I'm off the chart (which means I must be balancing out hordes of people only wearing stuff once or twice). I am still wearing one t-shirt I bought in 1998! I actually get given t-shirts (from relatives or employers -- they're big on giving out gear here) faster than I wear them out. I had to get a new phone this year or late last year because I'd had my other phone a few years and it got to the point where I couldn't even read the screen anymore (I still used it for a few months while it was partially readable). This is in contrast to people who change phones several times per year. I am simply not a consumer like most people, I think, so I don't think how any information collected about me is going to be that useful.

Maybe I really am the exception, but I think that whilst I'm a little extreme, I don't think I'm that unusual. As such, I still think that a lot of this love affair with internet companies is overdone.

[Adam_CLO]

The people who actually click on ads and purchase things online are the exception not the norm. We (marketers) deal with click through rates that are fractions of one percent. However the beauty of the internet is that products are being exposed to people millions of times so those small percentages add up to a lot.

I run an online site that gives away a lot of free content. I only need a small percentage of users to pay for goods to make my business profitable. However all the free users help my site gain popularity and move up the search engine rankings, thereby exposing it to potential paying users, so the system works well.

[schatbot]

to answer the question about how .com's make money, the basic answer is advertising. Nearly 50 billion USD worth per year of it. 50 billion is enough to make me moist...

Don't forget all those market research teams which fork over hundreds of thousands of dollars for consumer reports from the likes of google, facebook, yahoo, etc etc....

Many websites have membership options which require money...

Also, a FAR less serious form of income for facebook is that it gets paid through facebook credits, zynga games, etc where you need to spend real money on things.

Hope that helps explain why people invest in .com's. Might be a bubble? sure, but if you're smart you'd make your money now before it pops.

[headhonchoII]

The fact that websites and apps make money from advertising or data collection is nothing new and not very relevant to the discussion 'Is this the second Dot.com bubble'?

Because from where I stand paying 1 billion USD in cash and stock for a photo app that can easily be copied is definitely bubblistic. It says that Facebook is not confident enough in their pre-eminence. It says that they have too much investor money to play with without many questions asked. It says they are desperate to put up better numbers prior to their IPO.
Group-on is an even bigger disaster in the making.

[Belgian Pie]

There was a report on DW-TV recently and they interviewed young girls 16-19 of age ... they said that they use FB ads to figure out what's hot and trendy and then spread the word to all their FB friends ... basically setting off buying frenzy.

The report also stated that FB could not or would not answer questions about privacy infringement and data mining/selling and what the actual goal of FB is.

[Belgian Pie]

Oh, BTW ... the report also cleared up that the Angry bird app actually tracks all your phone calls and internet traffic.

[headhonchoII]

The reason Facebook grew so fast is they incorporated a very simple program that raids your e-mail contacts and sends an invitation. Not only that, it records your friends names and details and creates a web of who is connected to who which enables it to suggest who should be your friend.

It basically piggy backs on internet users ignorance. However Facebook and other social networks grew so fast and were fun to use and most importantly got a free ride from the adoring media so people over looked how they actually grew their membership base.

Try going into somebody's house and taking down all their telephone contacts and calling them one by one. But it's much worse than that, because these social networks record everything you are doing , your links to everybody and all your personal information. So it's like somebody giving you a free phone and then they record everything you say and everybody you call and then they sell that information to whoever they want.

Now Facebook has us all tagged in our photos so they can sell that information too for facial recognition use.

To be fair to Facebook Google and others are just as bad.