4 ms·

If you're talking about profits, youtube wasn't a good company before the acquisition, and it still isn't. But it is an important company.

seanp2k2 10y ago
Geocities was important too, but I'd argue that it's important socially and not businessly. Users love Tumblr, but there's probably no way to convert that into profits. Same thing with Twitter IMO. Everyone hates promoted tweets, but many love Twitter. In particular, it's great for political dissent and organizing protests. Good luck monetizing that. In the case of SnapChat, tons of their most active and loyal users are in elementary / middle / high school. I was in a restaurant a few days ago an saw 4 children whose shoulders came just above the table sitting there for an hour snapchatting each other, and suddenly the massive user base of it made sense. Again here, good luck extracting money from children inside an app that they very likely try to hide from their parents. In the case of FB Messenger / WhatsApp / Telegram / Line / Kik / Viber / Kakao: this stuff is commodity chat, and the value lies in other people in your network using it. If it's found that any one of them are doing something that users don't like (like showing ads or reading your messages or mining who you're talking to), the users will have no problem finding alternatives. It's like trying to monetize Skype, without the value proposition of being able to call land lines. It's like saying that AOL Instant Messenger was worth $1bn. The value is in the utility of the thing, which crucially, is trivially replaced by a competitor. At least Facebook has the benefit of not requiring returns on messaging and instead pitching it as an integration with their core platform, which is great at getting ads in front of eyeballs. Again here, users love these utilities, but I don't ultimately think that they're economically viable businesses.
- galistoca 10y ago
  I am quite sure you're objectively wrong about snapchat userbase and their user behavior. Also, not sure what your point is with regards to my comment. Maybe my point wasn't clear. My point was just because something doesn't directly generate profit doesn't mean it's useless, since it can act as a critical strategic asset to another company. Youtube was an excellent acquisition for Google despite the fact that it's not so good in terms of profit. Tumblr could have been something like that for Yahoo, except that there were many things wrong with Yahoo itself and the vision couldn't be realized.

seanp2k2 10y ago

Geocities was important too, but I'd argue that it's important socially and not businessly. Users love Tumblr, but there's probably no way to convert that into profits. Same thing with Twitter IMO. Everyone hates promoted tweets, but many love Twitter. In particular, it's great for political dissent and organizing protests. Good luck monetizing that. In the case of SnapChat, tons of their most active and loyal users are in elementary / middle / high school. I was in a restaurant a few days ago an saw 4 children whose shoulders came just above the table sitting there for an hour snapchatting each other, and suddenly the massive user base of it made sense. Again here, good luck extracting money from children inside an app that they very likely try to hide from their parents. In the case of FB Messenger / WhatsApp / Telegram / Line / Kik / Viber / Kakao: this stuff is commodity chat, and the value lies in other people in your network using it. If it's found that any one of them are doing something that users don't like (like showing ads or reading your messages or mining who you're talking to), the users will have no problem finding alternatives. It's like trying to monetize Skype, without the value proposition of being able to call land lines. It's like saying that AOL Instant Messenger was worth $1bn. The value is in the utility of the thing, which crucially, is trivially replaced by a competitor. At least Facebook has the benefit of not requiring returns on messaging and instead pitching it as an integration with their core platform, which is great at getting ads in front of eyeballs. Again here, users love these utilities, but I don't ultimately think that they're economically viable businesses.

galistoca 10y ago
I am quite sure you're objectively wrong about snapchat userbase and their user behavior. Also, not sure what your point is with regards to my comment. Maybe my point wasn't clear. My point was just because something doesn't directly generate profit doesn't mean it's useless, since it can act as a critical strategic asset to another company. Youtube was an excellent acquisition for Google despite the fact that it's not so good in terms of profit. Tumblr could have been something like that for Yahoo, except that there were many things wrong with Yahoo itself and the vision couldn't be realized.