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by capkutay
5091 days ago
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Many of the companies raising good funding today are innovative and create value in the valley and in the world. I don't understand why people compare that to the dotcom bubble where 6-month old web companies with no significant value would raise tens to hundreds of millions of dollars. Look at stripe for example, they're an excellent company that has proven their product is in demand. It's much more reasonable for a company like this to be allowed to scale versus the likes of pets.com. |
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I mean, much like drop.io, almost all of those companies have some value. Even facebook is worth something, it's just, well, not worth 60 billion or whatever it's selling for now. I mean, yeah, they do have the userbase (right now) to beyond what google has done to advertising... but damn, that's hard to do. And I don't think that Facebook has the deep understanding that google has that if people start thinking of them as creepy, they are dead. (I mean, I think google has the same problems as an autistic guy at a party; google /understands/ that being creepy is bad... but google doesn't have a good understanding of what creepy is. Facebook is the guy that read some "fast seduction" crap and is now proud of being a total asshole. )
I mean, I think I understand why google can make so much money off advertising and (very related) why people think facebook can make so much more; See, I just bought some advertising in Mountain View Safeway stores. Go to the mountain view safeway and you will see green on black prgmr.com logos on the dividers you place between your food, instead of the usual pictures of real-estate agents. I mean, all the people I know at google have talked to me about it, and they thought it was cool, but I've been talking about this for a while, so I don't know if they noticed it because they know me or what. Figuring out the effectiveness of meatspace advertising is difficult. If i bought ads on google, I'd be able to easily track how many customers I got per dollar, right? Of course, anyone would be willing to pay more for advertising if they knew what they were getting out of it; if you give me customers and I make $10 off each customer, what's wrong with giving you $5? heck, I could give you $9.
Problem is, I don't think that online advertising is as traceable as you think. I mean, sure, I know that guy that just signed up clicked on to my site through a google adwords ad, right? but you don't buy something the first time you hear about it. Maybe that guy saw a blog about me last month? the google adwords link might have just been more convenient for him than the organic search results.
I think that online advertising, in general, is overpriced because of this.
I understand that the value proposition of facebook is that they (potentially) can track buyers better. that blog you read about me last month? probably had a facebook 'like' button. Maybe they could then use that to better measure my actual advertising returns?
The biggest problem I see with that proposition is, well, that's a hard problem to solve at all... and not only do they need to solve it, they need to solve it and simplify the results down to the point where your average MBA can understand them.