5 ms·

I don't think one extraordinary data point shows anything, actually.

allochthon 13y ago
It's not one datapoint. Instagram, Snapchat, WhatsApp. Three smallish companies, three mind-boggling valuations. I don't think it necessarily indicates that there is a bubble, but it does sound like funny money.
- xxchan 13y ago
  All bought (or they tried) by Facebook. That's the one data point.
  - k-mcgrady 13y ago
    Facebook weren't the only company trying to acquire those companies though. Google reportedly offered as much, maybe more than Facebook for WhatsApp.
- bradleyjg 13y ago
  Don't forget Nest.
  - mmanfrin 13y ago
    I think Nest was a fine buy. They got a hardware company shaking up what was sort of a dead industry (name me one other brand of smoke detector), but also gets them the ability to spread Google in to the home (you're going to see full home automation from Google soon) and they got the designer of the iPod. Decent buy.
    - hippee-lee 13y ago
      Honeywell: I remember it because I bought the 'programmable' one for 199. It was a pain to program, separate programs for cooling and heating, a pain to set right and it looked, well like a beige box on my wall. When I moved and they had an ancient thermostat it was easy to pay $50 more than the above just so I could control it with a phone. Setting the program is much, much easier than the Honeywell. I think they bought best for the team as much as the product and I hope nest does sprinkler systems next in their pursuit of solving first world problems.
- Volscio 13y ago
  Money is a lot tighter in most other deals. It's nothing like the wild west of the dotcom era where companies were formed with little more than a mission statement and they'd get pumped up. These types of financial articles are the worst because they are unable to accurately predict the future of new markets. They're the types of articles that you read a decade later and kind of pat on their head. Skepticism of an industry is one thing, but most of the time that skepticism is not coming from any type of informed or even historically accurate perspective. It's just not understanding what the current market price of things is. Which is pretty dangerous for a newspaper article writer.
- argonaut 13y ago
  Instagram is a bad example. As far as we can see, Instagram has kept on growing and growing, and the ironic thing is that all those blog posts talking about how teens are leaving FB show them flocking to Instagram. So it was obviously a brilliant strategic move, and time will tell if it was a brilliant revenue generating move (I suspect Instagram will make buckets of money eventually, like YouTube does). The key thing to look at to see if it's a bubble is IPOs. And as far as I can see, good companies are the ones IPOing successfully, and less stellar companies (Zynga, Groupon) are getting punished.
  - bsder 13y ago
    > Instagram is a bad example. Instagram is a good example. As soon as Facebook bought it, the teens started switching to Snapchat, etc. The problem for Facebook is that to be profitable it needs to connect and make visible things that people don't want connected or made visible.
    - nemothekid 13y ago
      >the teens started switching to Snapchat huh? AFAIK I've heard nothing of the Instagram exodus, and its actually growing. Are we sure that Instagram is actually in a bad spot, or are we just praying for doom and schadenfreude?
    - girvo 13y ago
      Sigh. No they use both. Instagram has kept growing.
    - argonaut 13y ago
      The "switching" you speak of has not happened and I've never seen any numbers that back up that claim (specifically, that they're leaving Instagram in favor of Snapchat). Sure, lots of teens are using Snapchat now; doesn't mean they're leaving Instagram.
    - pswilson14 13y ago
      According to my sister (as well as all the data I've seen and the literature I've read on the subject) the usage of Snapchat and Instagram are BOTH increasing in popularity. The kids aren't as into Facebook though.
- nl 13y ago
  Sounds like investors want to get into an area that is growing like a weed. Instagram was a great buy for Facebook (and yet people questioned it at the time). Viber sold for $900M, and no one seems to complain. WhatsApp is much more popular & growing faster.
- mmanfrin 13y ago
  Instagram was a good buy, Snapchat didnt sell, so the last of your example was WhatsApp, the original point of this conversation.

It's not one datapoint. Instagram, Snapchat, WhatsApp. Three smallish companies, three mind-boggling valuations. I don't think it necessarily indicates that there is a bubble, but it does sound like funny money.

xxchan 13y ago
All bought (or they tried) by Facebook. That's the one data point.
- k-mcgrady 13y ago
  Facebook weren't the only company trying to acquire those companies though. Google reportedly offered as much, maybe more than Facebook for WhatsApp.
bradleyjg 13y ago
Don't forget Nest.
- mmanfrin 13y ago
  I think Nest was a fine buy. They got a hardware company shaking up what was sort of a dead industry (name me one other brand of smoke detector), but also gets them the ability to spread Google in to the home (you're going to see full home automation from Google soon) and they got the designer of the iPod. Decent buy.
  - hippee-lee 13y ago
    Honeywell: I remember it because I bought the 'programmable' one for 199. It was a pain to program, separate programs for cooling and heating, a pain to set right and it looked, well like a beige box on my wall. When I moved and they had an ancient thermostat it was easy to pay $50 more than the above just so I could control it with a phone. Setting the program is much, much easier than the Honeywell. I think they bought best for the team as much as the product and I hope nest does sprinkler systems next in their pursuit of solving first world problems.
Volscio 13y ago
Money is a lot tighter in most other deals. It's nothing like the wild west of the dotcom era where companies were formed with little more than a mission statement and they'd get pumped up. These types of financial articles are the worst because they are unable to accurately predict the future of new markets. They're the types of articles that you read a decade later and kind of pat on their head. Skepticism of an industry is one thing, but most of the time that skepticism is not coming from any type of informed or even historically accurate perspective. It's just not understanding what the current market price of things is. Which is pretty dangerous for a newspaper article writer.
argonaut 13y ago
Instagram is a bad example. As far as we can see, Instagram has kept on growing and growing, and the ironic thing is that all those blog posts talking about how teens are leaving FB show them flocking to Instagram. So it was obviously a brilliant strategic move, and time will tell if it was a brilliant revenue generating move (I suspect Instagram will make buckets of money eventually, like YouTube does). The key thing to look at to see if it's a bubble is IPOs. And as far as I can see, good companies are the ones IPOing successfully, and less stellar companies (Zynga, Groupon) are getting punished.
- bsder 13y ago
  > Instagram is a bad example. Instagram is a good example. As soon as Facebook bought it, the teens started switching to Snapchat, etc. The problem for Facebook is that to be profitable it needs to connect and make visible things that people don't want connected or made visible.
  - nemothekid 13y ago
    >the teens started switching to Snapchat huh? AFAIK I've heard nothing of the Instagram exodus, and its actually growing. Are we sure that Instagram is actually in a bad spot, or are we just praying for doom and schadenfreude?
  - girvo 13y ago
    Sigh. No they use both. Instagram has kept growing.
  - argonaut 13y ago
    The "switching" you speak of has not happened and I've never seen any numbers that back up that claim (specifically, that they're leaving Instagram in favor of Snapchat). Sure, lots of teens are using Snapchat now; doesn't mean they're leaving Instagram.
  - pswilson14 13y ago
    According to my sister (as well as all the data I've seen and the literature I've read on the subject) the usage of Snapchat and Instagram are BOTH increasing in popularity. The kids aren't as into Facebook though.
nl 13y ago
Sounds like investors want to get into an area that is growing like a weed. Instagram was a great buy for Facebook (and yet people questioned it at the time). Viber sold for $900M, and no one seems to complain. WhatsApp is much more popular & growing faster.
mmanfrin 13y ago
Instagram was a good buy, Snapchat didnt sell, so the last of your example was WhatsApp, the original point of this conversation.