4 ms·

The price of the biggest new tech company of all, Facebook, has done nothing but go down since its IPO. The public has said it's overvalued at $100 billion. T

by stevenj 14y ago

The price of the biggest new tech company of all, Facebook, has done nothing but go down since its IPO. The public has said it's overvalued at $100 billion. That indicates to me that we're not in a bubble.

presidentender 14y ago
It could be that venture capital is in a bubble, but that the general market is not.
- dasil003 14y ago
  Given the dearth of IPOs I'd say private investors are the only place a bubble could be by definition.
cft 14y ago
What I do not understand, is why Facebook is called a "technology company". It's no more of a technology company than News Corp or any other media company. The technology there is rather simple, compared to biotech or SpaceX. I would classify it as media/entertainment (which harkens back to Zukerberg Productions) as it used to say at the bottom of FB a few years ago.
- dasil003 14y ago
  I take it you're a web developer of some sort, so web technology seems trivial. But building, evolving and operating a site like Facebook is an incredible technical challenge. Sure it's not biotech or space tech which require hard science, and sure the penalties for failure are not as high, but the infrastructure they're building is world class tech. Running a newspaper site at the same scale would be orders of magnitude easier because it's much more trivially cacheable, and I say "would be" because there is no newspaper site that operates at that scale. Also, speaking of News Corp, let me point out that a big part of how Facebook killed MySpace was MySpace was not able to come anywhere near the performance, or pace of evolution of Facebook. It's also worth noting that the previous market leader, Friendster, failed because they couldn't fix their performance problems when they were a tiny fraction of the size Facebook is now. There's no need to mince words: Facebook is slinging serious scalability sauce that could only be developed by a leading technology company.
- DanielRibeiro 14y ago
  It is because software is eating the world. Marc Andreessen (who actually sits on FB board) explained this recently[1]. Another way of seeing this, is through how much engineering goes on their scaling problems. [1] http://blakemasters.tumblr.com/post/22660214207/peter-thiels-cs183-startup-class-10-notes-essay http://blakemasters.tumblr.com/post/22660214207/peter-thiels...
michaelochurch 14y ago
In VC-land, down rounds are highly stigmatized. No one knows what anything is worth, but a company that remains in reasonably good esteem can ensure that the valuation doesn't go down, even if it "should" based on fundamentals. Terms can get worse and funding may become harder to get, but down rounds can be prevented unless something really bad is happening. On the stock market, where the valuation process is nearly continuous, almost 50 percent of days are down days (the daily drift is tiny in comparison to the standard deviation). What has happened is that the Facebook stock has gone from an environment with artificial support to one without it. It has nothing to do with whether there's a bubble.

by stevenj 14y ago

presidentender 14y ago

It could be that venture capital is in a bubble, but that the general market is not.

dasil003 14y ago
Given the dearth of IPOs I'd say private investors are the only place a bubble could be by definition.

cft 14y ago

What I do not understand, is why Facebook is called a "technology company". It's no more of a technology company than News Corp or any other media company. The technology there is rather simple, compared to biotech or SpaceX. I would classify it as media/entertainment (which harkens back to Zukerberg Productions) as it used to say at the bottom of FB a few years ago.

dasil003 14y ago
I take it you're a web developer of some sort, so web technology seems trivial. But building, evolving and operating a site like Facebook is an incredible technical challenge. Sure it's not biotech or space tech which require hard science, and sure the penalties for failure are not as high, but the infrastructure they're building is world class tech. Running a newspaper site at the same scale would be orders of magnitude easier because it's much more trivially cacheable, and I say "would be" because there is no newspaper site that operates at that scale. Also, speaking of News Corp, let me point out that a big part of how Facebook killed MySpace was MySpace was not able to come anywhere near the performance, or pace of evolution of Facebook. It's also worth noting that the previous market leader, Friendster, failed because they couldn't fix their performance problems when they were a tiny fraction of the size Facebook is now. There's no need to mince words: Facebook is slinging serious scalability sauce that could only be developed by a leading technology company.
DanielRibeiro 14y ago
It is because software is eating the world. Marc Andreessen (who actually sits on FB board) explained this recently[1]. Another way of seeing this, is through how much engineering goes on their scaling problems. [1] http://blakemasters.tumblr.com/post/22660214207/peter-thiels-cs183-startup-class-10-notes-essay http://blakemasters.tumblr.com/post/22660214207/peter-thiels...

michaelochurch 14y ago

In VC-land, down rounds are highly stigmatized. No one knows what anything is worth, but a company that remains in reasonably good esteem can ensure that the valuation doesn't go down, even if it "should" based on fundamentals. Terms can get worse and funding may become harder to get, but down rounds can be prevented unless something really bad is happening. On the stock market, where the valuation process is nearly continuous, almost 50 percent of days are down days (the daily drift is tiny in comparison to the standard deviation). What has happened is that the Facebook stock has gone from an environment with artificial support to one without it. It has nothing to do with whether there's a bubble.