In a new story, The New York Times says the deal is "a tale about the culture of the San Francisco Bay Area tech scene, driven by a tightly woven web of entrepreneurs and investors who nurture one another’s projects with money, advice and introductions to the right people. By and large, it is a network of young men, many who attended Silicon Valley's Stanford University and had the attention of the world’s biggest venture capitalists before they even left campus."
But it's also about Red Bull-fueled engineering jam sessions, and the power of celebrity users like Justin Bieber.
A couple decades ago, the joke was: "Cocaine is God's way of saying you have too much money".
ReplyDeleteIn the Internet Age, paying with stock-inflated dollars (or dollar-inflated stock) may be proof of collective management ADD. Most of the time, these acquisitions disappear like a rock in the ocean.
Remember the grand-daddy of all inflated stock purchases: AOL "buying" Time-Warner. Such a great deal that Ted Turner lost 80% of his fortune.
How many untold billions has Microsoft spent trying to move beyond just software? Other than the X-Box, that money became dust in the wind. Eventually Microsoft gave up and started paying dividends.
That may be a parable for a certain publishing company, which has spent tens of millions on various websites and other digital goodies, to (let's be charitable) mixed success.
"Facebook's stunning $1 billion offer for mobile photo site Instagram was hammered out during 48 frenetic hours last weekend, illustrating the speed with which digital media is overcoming analog companies like Gannett."
ReplyDeleteHow about we wait and see how long it takes Instagram to turn into a punchline?