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By why are they willing to pay these high prices now vs a few years ago? What has changed in the economy or investing climate and is it sustainable?

by pkaye 11y ago

paulpauper 11y ago
these companies (snapchat, uber, dropbox, pinterest, etc) are rapidly growing, that's a major why
- toomuchtodo 11y ago
  Are any of these profitable (except maybe, possibly Uber)?
  - ropiku 11y ago
    The problem is even if they could be profitable, they choose to invest all the money they can in growing rather than making a profit. So it's hard to know.
edgyswingset 11y ago
Totally inexperienced opinion here: We're in an advertising bubble. Remember the ridiculousness surrounding the "Yo" app? People running around in circles about how it can be a great way to increase brand awareness due to the simplicity of it all? How it can connect with so many different apps? Yeah ... it's panned out exactly like its detractors predicted: sharp declines in downloads, hype is dead, and people have moved on to the next social app fad. Another factor I'm noticing is international money. Uber didn't start approaching ridiculous valuation levels until Chinese investors started getting on the train.
- shostack 11y ago
  You cited one defunct app that never went anywhere as evidence of an advertising bubble? While I definitely think display and video CPMs are overvalued compared to what they drive (which attribution solutions will help correct), there is strong measurable value that Google, FB and Bing are delivering from a post-click measurement standpoint. But let's just conveniently ignore these companies that drive billions in revenue for their customers.
  - lumpypua 11y ago
    > You cited one defunct app that never went anywhere as evidence of an advertising bubble? That they were able to raise $1.5M in seed funding is evidence of a bubble. https://www.crunchbase.com/organization/yo https://www.crunchbase.com/organization/yo
    - shostack 11y ago
      It is not. You are citing a single example of one company that got seed funding from a few investors who are not top tier players. Your point provides zero evidence to a bubble in the advertising industry, which is a behemoth filled with established players driving measurable value for their customers.
gozur88 11y ago
You can't get good returns in the bond market with interest rates this low, so there's a lot of money out there looking for better returns even if it means higher risk.

By why are they willing to pay these high prices now vs a few years ago? What has changed in the economy or investing climate and is it sustainable?

by pkaye 11y ago

By why are they willing to pay these high prices now vs a few years ago? What has changed in the economy or investing climate and is it sustainable?

paulpauper 11y ago

these companies (snapchat, uber, dropbox, pinterest, etc) are rapidly growing, that's a major why

toomuchtodo 11y ago
Are any of these profitable (except maybe, possibly Uber)?
- ropiku 11y ago
  The problem is even if they could be profitable, they choose to invest all the money they can in growing rather than making a profit. So it's hard to know.

edgyswingset 11y ago

Totally inexperienced opinion here: We're in an advertising bubble. Remember the ridiculousness surrounding the "Yo" app? People running around in circles about how it can be a great way to increase brand awareness due to the simplicity of it all? How it can connect with so many different apps? Yeah ... it's panned out exactly like its detractors predicted: sharp declines in downloads, hype is dead, and people have moved on to the next social app fad. Another factor I'm noticing is international money. Uber didn't start approaching ridiculous valuation levels until Chinese investors started getting on the train.

shostack 11y ago
You cited one defunct app that never went anywhere as evidence of an advertising bubble? While I definitely think display and video CPMs are overvalued compared to what they drive (which attribution solutions will help correct), there is strong measurable value that Google, FB and Bing are delivering from a post-click measurement standpoint. But let's just conveniently ignore these companies that drive billions in revenue for their customers.
- lumpypua 11y ago
  > You cited one defunct app that never went anywhere as evidence of an advertising bubble? That they were able to raise $1.5M in seed funding is evidence of a bubble. https://www.crunchbase.com/organization/yo https://www.crunchbase.com/organization/yo
  - shostack 11y ago
    It is not. You are citing a single example of one company that got seed funding from a few investors who are not top tier players. Your point provides zero evidence to a bubble in the advertising industry, which is a behemoth filled with established players driving measurable value for their customers.

gozur88 11y ago

You can't get good returns in the bond market with interest rates this low, so there's a lot of money out there looking for better returns even if it means higher risk.