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I'm curious if Hacker News would have brought such pessimism to the AAPL and MSFT IPOs as they have with Facebook and Twitter. Around 500 million users, around

by jmduke 13y ago

I'm curious if Hacker News would have brought such pessimism to the AAPL and MSFT IPOs as they have with Facebook and Twitter. Around 500 million users, around 750 million tweets per day. That data might not be worth everything, but it's definitely worth something.

loganfrederick 13y ago
A major difference is the valuation these companies are getting. Compare Facebook's $80 billion to $100 billion to Apple's $4.8 billion IPO in today's inflation-adjusted dollars. I think that is a large part of where the cynicism is coming from. Calculated using: http://www.quora.com/What-was-Apples-valuation-at-IPO http://www.quora.com/What-was-Apples-valuation-at-IPO and http://www.usinflationcalculator.com/ http://www.usinflationcalculator.com/
- redthrowaway 13y ago
  AAPL IPO'd in 1980, when there were 1M personal computers in the world. Total.[1] The tech sector was just tiny compared to what it is today, and nobody predicted the WWW or the ubiquity of web-capable devices. By contrast, when FB IPO'd it had 845M users[2], or 8.3% of the world's population. The two simply aren't comparable. AAPL made niche luxury products, and FB had something close to half the potential market engaged on a daily basis. [1] http://www.corbinball.com/articles_technology/index.cfm?fuseaction=cor_av&artID=8878 http://www.corbinball.com/articles_technology/index.cfm?fuse... [2] http://en.wikipedia.org/wiki/Initial_public_offering_of_Facebook#Filing_and_roadshow http://en.wikipedia.org/wiki/Initial_public_offering_of_Face...
  - loganfrederick 13y ago
    But your argument can easily be used against Facebook. When you're IPOing at that late of a stage, all the gains have already gone to the private market investors. Facebook will have to come with drastic new revenue models to justify its valuation, and very few companies have reached a $100 billion valuation, let alone grown from there. And again, even if it does continue to grow financially, most of the gains have already been made. There are VCs who have made this point to lower Sarbox requirements so companies can go public earlier. I believe Ben Horowitz made a blog post on the topic, but I could not quickly find the link.
  - krrrh 13y ago
    Every time one of Apple's products sold it resulted in cash transferring over to Apple. They had a viable, proven business model selling computers to business, consumers, and educational institutions, were leaders of a new industry that everyone agreed had a huge amount of growth ahead of it. Nobody thought that PCs would continue to be a niche product throughout the 1980s. Facebook owned, and owns, only a tiny slice of the advertising market, despite being so far along in developing their product. Remember, facebook's users and attention is their product. Their customer-base - companies who want to advertise is still underdeveloped.
    - dreamdu5t 13y ago
      This is an excellent point. Sure, Facebook has the biggest audience, but somehow I only ever see a few companies in my ad rotation.
benihana 13y ago
Users and tweets aren't nearly as impressive as hardware or software sales numbers. But since it's Hacker News commentary, I guess yes plenty of pessimism.
apalmer 13y ago
The main difference in my eyes is that its relatively easy to evaluate a business that bases revenue off sales of tangible goods. Twitter and Facebook are a much harder valuation because there isn't a clear standard way of evaluating them. Evaluating them is not the same as evaluating google, even though they are both in the online advertising biz...

by jmduke 13y ago

loganfrederick 13y ago

A major difference is the valuation these companies are getting. Compare Facebook's $80 billion to $100 billion to Apple's $4.8 billion IPO in today's inflation-adjusted dollars. I think that is a large part of where the cynicism is coming from. Calculated using: http://www.quora.com/What-was-Apples-valuation-at-IPO http://www.quora.com/What-was-Apples-valuation-at-IPO and http://www.usinflationcalculator.com/ http://www.usinflationcalculator.com/

redthrowaway 13y ago
AAPL IPO'd in 1980, when there were 1M personal computers in the world. Total.[1] The tech sector was just tiny compared to what it is today, and nobody predicted the WWW or the ubiquity of web-capable devices. By contrast, when FB IPO'd it had 845M users[2], or 8.3% of the world's population. The two simply aren't comparable. AAPL made niche luxury products, and FB had something close to half the potential market engaged on a daily basis. [1] http://www.corbinball.com/articles_technology/index.cfm?fuseaction=cor_av&artID=8878 http://www.corbinball.com/articles_technology/index.cfm?fuse... [2] http://en.wikipedia.org/wiki/Initial_public_offering_of_Facebook#Filing_and_roadshow http://en.wikipedia.org/wiki/Initial_public_offering_of_Face...
- loganfrederick 13y ago
  But your argument can easily be used against Facebook. When you're IPOing at that late of a stage, all the gains have already gone to the private market investors. Facebook will have to come with drastic new revenue models to justify its valuation, and very few companies have reached a $100 billion valuation, let alone grown from there. And again, even if it does continue to grow financially, most of the gains have already been made. There are VCs who have made this point to lower Sarbox requirements so companies can go public earlier. I believe Ben Horowitz made a blog post on the topic, but I could not quickly find the link.
- krrrh 13y ago
  Every time one of Apple's products sold it resulted in cash transferring over to Apple. They had a viable, proven business model selling computers to business, consumers, and educational institutions, were leaders of a new industry that everyone agreed had a huge amount of growth ahead of it. Nobody thought that PCs would continue to be a niche product throughout the 1980s. Facebook owned, and owns, only a tiny slice of the advertising market, despite being so far along in developing their product. Remember, facebook's users and attention is their product. Their customer-base - companies who want to advertise is still underdeveloped.
  - dreamdu5t 13y ago
    This is an excellent point. Sure, Facebook has the biggest audience, but somehow I only ever see a few companies in my ad rotation.

benihana 13y ago

Users and tweets aren't nearly as impressive as hardware or software sales numbers. But since it's Hacker News commentary, I guess yes plenty of pessimism.

apalmer 13y ago

The main difference in my eyes is that its relatively easy to evaluate a business that bases revenue off sales of tangible goods. Twitter and Facebook are a much harder valuation because there isn't a clear standard way of evaluating them. Evaluating them is not the same as evaluating google, even though they are both in the online advertising biz...