4 ms·

Tech companies are valued by how they dominate particular sectors/niches and the potential growth of that sector/niche. Facebook doesn't dominate social any mo

Tech companies are valued by how they dominate particular sectors/niches and the potential growth of that sector/niche. Facebook doesn't dominate social any more like it once did. It did so with Facebook itself then with instagram but TikTok is grabbing the current generation of new users. It can't grow like it once did and usage of its existing services will gradually decline. It's betting that the metaverse is the next social medium after TikTok's short form video. Personally I doubt that but that's the bet they're making.

rchaud 4y ago
Meta dominates the display ad market though, that is all they care about. Once TikTok is banned in America, they can grow it further.
- deelowe 4y ago
  TikTok isn't getting banned, don't be silly.
  - jq-r 4y ago
    Is it silly? It's already being banned from US and European government devices. It is just one more sentence away from being banned for general population in those huge regions.
    - CameronNemo 4y ago
      There is big chasm between banning an app from fleet devices and banning both an app and a website in an entire country. Especially one that is so enormously popular.
      - Hoyadonis 4y ago
        I cannot recall the last time I've seen such a bipartisan push for something so monumental. Just within the past week, Senators Josh Hawley (R-MO) and Mark Warner (D-VA) have been saying virtually the same thing: TikTok is an unprecedented national security threat.
    - skrtskrt 4y ago
      they're literally just forcing them to build datacenters to keep the data for Americans in America (and Indians in India, etc). TikTok is already publicly hiring a ton of people for this Once the data doesn't leave America this is going to go away. This is not that much different than just complying with the type of regulations the EU has. The American version is just involving a lot more chest pounding and fluff because there's no existing laws to enforce to make them do this. So they just have to do it through threats and relatively minor policy changes (like banning on government phones).
    - hnaccount141 4y ago
      I'm honestly more surprised that any social media apps were ever allowed on government devices.
    - deelowe 4y ago
      Yes it is. The government is just trying to get the data to stay within the US. TikTok only needs facilities here (and maybe some sort of air gap) to comply.
    - seanmcdirmid 4y ago
      Were US and European government officials/workers really big TikTok'ers to begin with?
  - jatins 4y ago
    TikTok got banned in India. I don't see why it can't get banned in US given CCP's complete control over Chinese companies
    - dvngnt_ 4y ago
      India regularly bans sites. just last month https://www.npr.org/2023/02/14/1156726845/indian-tax-authorities-raid-bbc-weeks-after-it-airs-documentary-critical-of-modi https://www.npr.org/2023/02/14/1156726845/indian-tax-authori... USA is different
  - deleted 4y ago
    [deleted]
- esskay 4y ago
  TikTok's highly unlikely to get banned, and if it was then 10 new replacements would pop up overnight. Facebook isn't anything like TikTok and likely never could be. Instagram might get close but even then its not the same thing. Also the display ad market is only useful if you've got people to advertise to. The more Facebook continues to turn into 'social networking for boomers' the less and less they'll make.
  - disgruntledphd2 4y ago
    They have 2.9bn monthly active users. Like, I left FB five years ago (after staying there for 5 years), and literally HN has been telling me that FB were doomed for all of that time. I totally agree that TikTok is a very strong competitor, unlike what they've seen before, but writing FB off right now is probably not the wisest long-term decision.
    - tenebrisalietum 4y ago
      How many in the US, and how many with desirable advertiser demographics. Selling reverse mortgage and pharmaceutical ads to boomer audiences turns you into television, where--at some point--the audience is going to pass on and leave it behind.
    - r00fus 4y ago
      A bit hyperbolic to say HN groupthink => "FB doomed". More like FB is over valued and their product has stagnated and alienated their user base.
      - disgruntledphd2 4y ago
        Facebook acquires IG (over ten years ago now), HN comments: https://news.ycombinator.com/item?id=3817840 https://news.ycombinator.com/item?id=3817840
  - rejectfinite 4y ago
    >and if it was then 10 new replacements would pop up overnight https://www.youtube.com/shorts https://www.youtube.com/shorts already here and not a chinese company if Im gonna brainrot Ill use youtube
wiremine 4y ago
> Tech companies... Is Meta really a tech company? It takes a lot of technology to do what they do, just like Netflix. But their core business isn't technology pre se, it's social media and advertising. I don't think they're the same class of businesses as Microsoft or Apple. Google is closer to Meta in terms of their revenue sources, but they have a much more diverse technology offering. They are trying to become a hardware company with their VR line, but it feels more like a hobby in the Apple sense of the term. I.e., a division with small revenues and without a clear growth path.
- djvdq 4y ago
  So Google also isn't tech company. Their core business isn't tech but also advertising after all. Using your logic there are almost 0 pure tech companies.
  - wiremine 4y ago
    You could indeed argue that. I think there's a difference between the product and the revenue. Google still feels like they produce a number of technical products, even if their revenue is mostly driven by ads. GCP, Android, and Chrome would be examples.
- carlosjobim 4y ago
  You are right. We never called movie studios or TV Channels "tech companies" even though all their work is distributed and created by technology.
  - lotsofpulp 4y ago
    Did movie studios and tv channels employ large departments of researchers and engineers that developed and deployed the technology?
    - carlosjobim 4y ago
      I don't know.
djvdq 4y ago
> It can't grow like it once did 1 in 4 people on earth is using FB every day. They simply can't grow more too much.
- rossdavidh 4y ago
  This is the most fundamental problem. In order to justify a "tech" P/E multiple, it has to be the case that exponential growth in the future is justified. For any MAMA (Meta, Apple, Microsoft, Alphabet) company, this is almost certainly impossible. This means it is time to transition to being a boring, reliable stock, probably with a substantial dividend. I'm not sure Zuckerberg is ready to do that.
  - edmundsauto 4y ago
    PE ratios for big tech. Google: 20:1 Amazon: 100:1 Netflix: 30:1 Apple: 22:1 Meta: 18:1 (For the financially illiterate like me who wanted to see what various ratios looked like. Meta (Facebook at the time) used to have a 7:1 ratio when they printed money before they doubled headcount while revenue flagged. If it weren’t for that hiring spree, they would be under 10:1 and not in the same class of “tech” multiples.
- timy2shoes 4y ago
  They go full Musk and colonize Mars so that they can achieve the exponential growth that investors expect.
- deleted 4y ago
  [deleted]
carlosjobim 4y ago
Attention just in itself has zero value. If companies are paying Facebook to advertise there, that is where the value is. Personally I think social media advertising is a pure scam industry, but so many small companies want to play that casino, and Facebook makes that easy for them.
voytec 4y ago
> It's betting that the metaverse is the next social medium Apparently that's no longer the case: "Mark Zuckerberg Quietly Buries the Metaverse"[1]. Company name looks just silly at this point. [1] https://news.ycombinator.com/item?id=35023493 https://news.ycombinator.com/item?id=35023493
f6v 4y ago
It’s a public company that makes money. Why would it be valued differently than any other public company that makes money? Do people expect 10x growth?

rchaud 4y ago

Meta dominates the display ad market though, that is all they care about. Once TikTok is banned in America, they can grow it further.

deelowe 4y ago
TikTok isn't getting banned, don't be silly.
- jq-r 4y ago
  Is it silly? It's already being banned from US and European government devices. It is just one more sentence away from being banned for general population in those huge regions.
  - CameronNemo 4y ago
    There is big chasm between banning an app from fleet devices and banning both an app and a website in an entire country. Especially one that is so enormously popular.
    - Hoyadonis 4y ago
      I cannot recall the last time I've seen such a bipartisan push for something so monumental. Just within the past week, Senators Josh Hawley (R-MO) and Mark Warner (D-VA) have been saying virtually the same thing: TikTok is an unprecedented national security threat.
  - skrtskrt 4y ago
    they're literally just forcing them to build datacenters to keep the data for Americans in America (and Indians in India, etc). TikTok is already publicly hiring a ton of people for this Once the data doesn't leave America this is going to go away. This is not that much different than just complying with the type of regulations the EU has. The American version is just involving a lot more chest pounding and fluff because there's no existing laws to enforce to make them do this. So they just have to do it through threats and relatively minor policy changes (like banning on government phones).
  - hnaccount141 4y ago
    I'm honestly more surprised that any social media apps were ever allowed on government devices.
  - deelowe 4y ago
    Yes it is. The government is just trying to get the data to stay within the US. TikTok only needs facilities here (and maybe some sort of air gap) to comply.
  - seanmcdirmid 4y ago
    Were US and European government officials/workers really big TikTok'ers to begin with?
- jatins 4y ago
  TikTok got banned in India. I don't see why it can't get banned in US given CCP's complete control over Chinese companies
  - dvngnt_ 4y ago
    India regularly bans sites. just last month https://www.npr.org/2023/02/14/1156726845/indian-tax-authorities-raid-bbc-weeks-after-it-airs-documentary-critical-of-modi https://www.npr.org/2023/02/14/1156726845/indian-tax-authori... USA is different
- deleted 4y ago
  [deleted]
esskay 4y ago
TikTok's highly unlikely to get banned, and if it was then 10 new replacements would pop up overnight. Facebook isn't anything like TikTok and likely never could be. Instagram might get close but even then its not the same thing. Also the display ad market is only useful if you've got people to advertise to. The more Facebook continues to turn into 'social networking for boomers' the less and less they'll make.
- disgruntledphd2 4y ago
  They have 2.9bn monthly active users. Like, I left FB five years ago (after staying there for 5 years), and literally HN has been telling me that FB were doomed for all of that time. I totally agree that TikTok is a very strong competitor, unlike what they've seen before, but writing FB off right now is probably not the wisest long-term decision.
  - tenebrisalietum 4y ago
    How many in the US, and how many with desirable advertiser demographics. Selling reverse mortgage and pharmaceutical ads to boomer audiences turns you into television, where--at some point--the audience is going to pass on and leave it behind.
  - r00fus 4y ago
    A bit hyperbolic to say HN groupthink => "FB doomed". More like FB is over valued and their product has stagnated and alienated their user base.
    - disgruntledphd2 4y ago
      Facebook acquires IG (over ten years ago now), HN comments: https://news.ycombinator.com/item?id=3817840 https://news.ycombinator.com/item?id=3817840
- rejectfinite 4y ago
  >and if it was then 10 new replacements would pop up overnight https://www.youtube.com/shorts https://www.youtube.com/shorts already here and not a chinese company if Im gonna brainrot Ill use youtube

wiremine 4y ago

> Tech companies... Is Meta really a tech company? It takes a lot of technology to do what they do, just like Netflix. But their core business isn't technology pre se, it's social media and advertising. I don't think they're the same class of businesses as Microsoft or Apple. Google is closer to Meta in terms of their revenue sources, but they have a much more diverse technology offering. They are trying to become a hardware company with their VR line, but it feels more like a hobby in the Apple sense of the term. I.e., a division with small revenues and without a clear growth path.

djvdq 4y ago
So Google also isn't tech company. Their core business isn't tech but also advertising after all. Using your logic there are almost 0 pure tech companies.
- wiremine 4y ago
  You could indeed argue that. I think there's a difference between the product and the revenue. Google still feels like they produce a number of technical products, even if their revenue is mostly driven by ads. GCP, Android, and Chrome would be examples.
carlosjobim 4y ago
You are right. We never called movie studios or TV Channels "tech companies" even though all their work is distributed and created by technology.
- lotsofpulp 4y ago
  Did movie studios and tv channels employ large departments of researchers and engineers that developed and deployed the technology?
  - carlosjobim 4y ago
    I don't know.

djvdq 4y ago

> It can't grow like it once did 1 in 4 people on earth is using FB every day. They simply can't grow more too much.

rossdavidh 4y ago
This is the most fundamental problem. In order to justify a "tech" P/E multiple, it has to be the case that exponential growth in the future is justified. For any MAMA (Meta, Apple, Microsoft, Alphabet) company, this is almost certainly impossible. This means it is time to transition to being a boring, reliable stock, probably with a substantial dividend. I'm not sure Zuckerberg is ready to do that.
- edmundsauto 4y ago
  PE ratios for big tech. Google: 20:1 Amazon: 100:1 Netflix: 30:1 Apple: 22:1 Meta: 18:1 (For the financially illiterate like me who wanted to see what various ratios looked like. Meta (Facebook at the time) used to have a 7:1 ratio when they printed money before they doubled headcount while revenue flagged. If it weren’t for that hiring spree, they would be under 10:1 and not in the same class of “tech” multiples.
timy2shoes 4y ago
They go full Musk and colonize Mars so that they can achieve the exponential growth that investors expect.
deleted 4y ago
[deleted]

carlosjobim 4y ago

Attention just in itself has zero value. If companies are paying Facebook to advertise there, that is where the value is. Personally I think social media advertising is a pure scam industry, but so many small companies want to play that casino, and Facebook makes that easy for them.

voytec 4y ago

> It's betting that the metaverse is the next social medium Apparently that's no longer the case: "Mark Zuckerberg Quietly Buries the Metaverse"[1]. Company name looks just silly at this point. [1] https://news.ycombinator.com/item?id=35023493 https://news.ycombinator.com/item?id=35023493

f6v 4y ago

It’s a public company that makes money. Why would it be valued differently than any other public company that makes money? Do people expect 10x growth?