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posted by
LaminatorX
on Saturday February 22 2014, @12:00AM
from the It's-like-a-telegram-but-on-a-phone dept.
from the It's-like-a-telegram-but-on-a-phone dept.
siliconwafer writes:
"Facebook's purchase of WhatsApp has generated a lot of noise in the financial and tech industries, with some calling the purchase price 'down-right silly' and 'jaw-dropping', and others have said the price is fair, but question the strategy. Is the purchase price evidence that we're entering entering another tech bubble reminiscent of the 1990s? Some say no, while others believe that a bubble may exist only in social media, given that the Global X Social Media Index ETF has outperformed the NASDAQ over the past year."
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Have we entered another tech bubble?
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(Score: 4, Interesting) by keplr on Saturday February 22 2014, @03:08AM
If there is a bubble, it's related to advertising. Any website, system, application, or device which primarily intends to make money from ads is built on a foundation of sand. At bottom is the flawed assumption that targeted internet advertising actually works as intended (I was about to say, as advertised). On open devices like desktops and laptops where users have access to their browser's functions and extension system, we've seen a huge rise in adblocking. On mobile devices ads are even more difficult to do well. The small screen size, user frustration from accidentally tapping an ad and being taken out of their running program, and the privacy implications of a more aware and personal device being used to serve ads have all caused mobile users to be the least profitable audience for ads--despite the fact that ad networks have been selling their services for mobile as the height of technical excellence when it comes to serving the right ads to the right markets.
Since WhatsApp doesn't rely on ads, I'd actually say that they are more strongly placed than others in that space. The entire segment of the economy is overvalued however, because it's almost all built on some sort of advertising model--and ads are overvalued. We've built some sort of psycho-cultural perpetual motion machine where expectation feeds back into reality: advertising must be working because everyone else is doing it.
(Score: 2) by FatPhil on Saturday February 22 2014, @09:04AM
There's no bubble in advertising. It can continually get more and more pervasive.
Citation needed? Try "Idiocracy" M. Judge, 2006, for a start.
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