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1960 "The Fall of Bershire Hathaway" -- the problem is that the textile business has been in decline after WW2, the overseas manufacturers are undercutting on
by jasode 12y ago
1960 "The Fall of Bershire Hathaway" -- the problem is that the textile business has been in decline after WW2, the overseas manufacturers are undercutting on price, and Egyptian cotton is more highly coveted than Alabama cotton. (Unforseen: The company stopped dealing with fabrics and became a holding company for investments.)
1980 "The Fall of Microsoft" -- the problem is that 100% of their revenue is programming tools such as MS BASIC and MS COBOL. These are not the high growth areas. There's a new breed of "productivity" software such as Dan Bricklin's VisiCalc spreadsheet introduced last year and WordPerfect word processor introduced this year. Microsoft is in serious trouble. (Unforseen: They saw explosive growth in MS Office and Windows o/s.)
1983 "The Fall of Intel" -- the problem is that they can't compete with cut throat memory prices from Japan. It's a low margin business. (Unforseen: They emphasized CPUs and got out of the RAM business.)
1997 "The Fall of Apple" -- ... we all know this story, yada yada yada
(The following quotes were made up but I hope people get the point.)
The problem with typical journalists predicting the "fall" of a company is that they base it on publicly known information. They base it on what the company has done in the past. The journalists don't sit in boardroom meetings outlining future plans that are unrelated to their current core revenue generators. The journalists also aren't privy to the secret skunkworks projects in the R&D pipeline. It's understandable that they don't have this information but they almost never make disclaimers of their blind spots which makes their predictions sound more convincing.
That's not to say that companies do fail to evolve. Kodak, Myspace, Atari, etc.
What's hard to say from the outside looking in is if Facebook is a 1980-Microsoft/1983-Intel or is it Kodak/Atari?
I think Zuckerberg and his team are well aware of the precarious and fickle nature of "social networking" and that's why they're exploring other channels such as payments, virtual reality, etc. Maybe they'll even get in on the health care monitoring game as well. If a journalist has some credible educated guesses or grabs an insider's scoop on these unknowns, that's much more interesting than predicting a companies death with incomplete information.
- Joeboy 12y agoThis way of looking at it only really makes sense if you're talking about Facebook the company, not Facebook the thing.
- jasode 12y agoThe journalist in the article was also writing about Facebook-the-Company while citing examples of Facebook-the-social-network-thing to determine its strengths. Notice that the following excerpts from the article talk about Facebook-the-Company actions and its future: >Then it scooped up WhatsApp, which had garnered hundreds of millions of users with a simple, solid messaging application. That cost Facebook $21.8 billion. >It’s all enough to make you wonder whether Facebook, unlike AOL or MySpace, really might be forever—or at least as forever as anything American capitalism is capable of producing.
- jeffreyrogers 12y agoSurvivorship bias. What about all the other companies that were the size of Berkshire Hathaway in the 60s, Microsoft in the 80s, Apple in the 90s, etc. that didn't develop into massive successes? It's also worth noting that Berkshire Hathaway the textile company no longer exists. The mill was shut down long ago and it's essentially the same company in name only. In fact it's hardly what you would consider a business in the typical sense of the word. BH has something like 30 employees (at Berkshire Hathaway itself, the rest are all employed by companies Berkshire owns, which it handles in a very hands off way). So citing these companies as evidence that criticism of Facebook is unfounded is of dubious validity.
- jasode 12y ago>Survivorship bias. I'm aware of that which is why I already listed counterexamples such as Myspace, Kodak that didn't make a successful transition to a new revenue growth. >So citing these companies as evidence that criticism of Facebook is unfounded is of dubious validity. Personally I despise Facebook and enjoy reading any criticisms about it. My point regarding this particular article was that the journalist (like every other journalist that's not "in the know") has to base his prediction on what Facebook is doing now. They don't volunteer their blind spot, therefore we as readers have to be aware of it.
- jeffreyrogers 12y agoGood points. I think I'm in agreement with you.