Two articles today discussing the coming end of the Facebook IPO lock-up. One argues there may be a sell-off; another, that there could be value in the stock and that the end of the lock-up could be a non-event. As one investor put it, in what has to be the irony of the year, “when does Facebook gets stupid cheap?” Cheap, I don’t know. Stupid, on the other hand, seems to apply to the whole episode.
Zynga’s “crash” story is a bit noisy, but still highlights the old investment dogma: a good business model does not necessarily imply a good investment – and in Zynga’s case, the assertion that it was a good business was never a sure thing.
The Facebook imbroglio had all the elements of a Mexican (or Brazilian, I admit) soap opera: a build-up toward success, then unexpected twists and turns revealing involving falls-from-grace and perhaps even villains. We’re yet to see if there will be any bounce-backs and happy endings. However, the angry reaction to the “soap opera” from the “general audience” – in this case, retail investors who apparently went all-in for the story – still managed to surprise me.
Facebook buys Instagram for US$ 1 billion and we do a linkfest, while wondering what it would take to invest in Facebook. Also: do Brazilians making waves in Silicon Valley signal that Brazil is booming in innovation?
MySpace killed Friendster only to be gobbled up by Facebook. Six years after NewsCorp bought MySpace for US$ 580 million it’s now sold for US$ 35 million. Google just launched its own “Facebook-killer” yesterday. There is absolutely no evidence yet whether Google Plus or any other competitor or substitute will bother Facebook. There is even less evidence about what’s “in the prices” – what prices? what metrics? what predictability of future cash flows? – so Social Media buyer beware.
We wrote last Thursday about LinkedIn’s IPO, which closed the first day of trading up almost 110% with some “interesting” valuation metrics. While there’s talk of other Web 2.0/ Socialmedia companies IPOing, Vanity Fair had a recent profile on Zynga – a “Web 3.0” company, certainly a buzzword we’ll hear a lot in the next few months. We remain interested in the business models arising from social media – if not in the valuations surrounding the sector.
Very interesting article on ReadWriteWeb about a Facebook acquisition and one hypothesis of the reasoning behind it. As we pointed out in our post “Marketing revolution”, and as this guy wrote so well, for some companies “going local isn’t enough – (they) want local plus social plus targeted”. Plus mobile, and deals… Other companies aren’t standing still: one of our readers sent us a video of Google’s relatively new “Hotpot” service, and don’t forget Groupon, the subject of our New Year’s Eve bonus post.
We don’t intend to (nor do we like to) follow the daily news and the noise level associated with it. That said, occasionally something jumps out and deserves a quip, and Facebook’s reported $50 billion valuation is one of these. Goldman’s deal is great: even if they eventually cash out at a lower valuation, the underwriting fees from the IPO will be astronomical. Finally, Mail.ru – the russian investors formerly known as Digital Sky Technologies – is shaping up to be a “Web 2.0/ Web 3.0” vehicle, albeit a potentially expensive one after its London listing late last year. One to track while Facebook doesn’t do the obvious IPO.
In this post we collect interesting links on Groupon, the inventor and world’s largest player in the collective buying market. We have always found the business model very interesting, and since Groupon is in the news with a US$ 950mm offering – having rejected weeks ago a US$ 6 billion offer by Google – our interest was renewed. Also noteworthy is the Brazilian Groupon “clone”, Peixe Urbano, which has dominated the local market and made Groupon’s life difficult in Brazil.
We’ve all heard about the Social Network movie, but a better time allocation is the Web2.0 Summit interview with the man himself, The Time Magazine Person of The Year, Mark Zuckerberg. Before we poke some fun at Facebook, here’s a thought: we do make fun of what’s relevant to us the more mainstream it gets, yet it doesn’t necessarily mark the end of an era. Think of Microsoft Windows, the OS we all have loved to hate for the last 25 years or so and it’s still there. The “winner takes all” aspect of the network effect in Facebook’s case is a fragile argument – what network are we talking about, and why will we have to interact with it the Facebook way? Just because we can’t see today what could topple Facebook, it doesn’t mean something – or likely a combination of “things” – won’t.