Gustavo Ballvé on November 11th, 2011
Food for thought, Home, Industries, Investment Themes, Media, Mental models, Portfolio Management, Signal or Noise, Tech

We’ve read two stories yesterday that “clicked” together. One was Seth Godin’s post on media choices and how one must now deal with scarcity of attention. Another was a NYT story on the deal with Youtube. It turns out that Disney has incredible content, as expected, but they don’t have kids’ “ears” anymore – incredibly enough for people over 30, Disney apparently doesn’t resonate as strongly and Youtube does. On the other hand, Disney brings Youtube some credibility with advertisers and families (the latter worry their kids only go on Youtube to watch what they perceive as useless, mindless, purposeless videos). In the hunt for attention, new media companies turn to content and content turns to new media. What can long-term investors make of this for the foreseeable future? Not much, we’d venture, since this market is too dynamic to call out clear winners. While we always remember that sometimes the smart action is inaction – “doing something by doing nothing“, that is, studying more and waiting for the “fat pitch” – another way to think about it is to consider focusing somewhere else. No matter who wins the content vs. distribution battles (Facebook? Apple? Microsoft? Google? Someone else we haven’t heard of yet?), it seems certain that the quantity/ complexity of web and data traffic in general can only increase, and companies providing infrastructure and solutions for those markets are not at all in risk of being “fads”: Cisco, Intel, Microsoft etc.

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