Bloat-company
A friend who was one of the early employees at Google told me there was a point when they had too many users, too much growth, and no money coming in. There was talk of shutting down the service.
That seems odd now but in the immediate post internet bubble years investors were wary of companies without a clear path to money.
Fast forward to today and there are companies such as Facebook with too many users, too much growth, and plenty of investment money coming in. Essentially, today's high fliers don't need to worry about cash and it shows. Facebook in particular is a rather fat company compared with the pre-Adwords Google. Long term this is going to have an impact on these companies. It's not in their DNA to make money. Their users aren't deriving benefit from the company's money making activity.
Early on Google learned to provide a valuable service that generates money so that the company could stay alive. Today, if you're looking for a product or service you can find it on Google Adwords. Over time Google has even become better at it.
Will Facebook fail? No, how can it fail with 500M friends. However, Facebook's $50B valuation seems like a bubble to me.
That seems odd now but in the immediate post internet bubble years investors were wary of companies without a clear path to money.
Fast forward to today and there are companies such as Facebook with too many users, too much growth, and plenty of investment money coming in. Essentially, today's high fliers don't need to worry about cash and it shows. Facebook in particular is a rather fat company compared with the pre-Adwords Google. Long term this is going to have an impact on these companies. It's not in their DNA to make money. Their users aren't deriving benefit from the company's money making activity.
Early on Google learned to provide a valuable service that generates money so that the company could stay alive. Today, if you're looking for a product or service you can find it on Google Adwords. Over time Google has even become better at it.
Will Facebook fail? No, how can it fail with 500M friends. However, Facebook's $50B valuation seems like a bubble to me.
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