I've been in the computer business all my life. I've learned something: there is no place on Earth where ridiculous amounts of money is spent on ideas that may or may not make sense like it is on tech.
I've seen companies spend millions on mainframe computers used for transferring text files around, which a handful of pc-sized servers could probably do just as well.
The "easy" money in the technology sector is something that should be seriously investigated IMHO. I think everyone who works with technology has seen their share of suspicious deals. The question to ask is often: who is providing the easy money, money which can be "wasted" as long as it produces a profit?
Facebook ran on investor money up until a short while ago(a short while in major corporation age, what, 2 or 3 years?).
I wouldn't be surprised if Apple bought Instagram. But Facebook is not even established as a blue chip, it's not a money printing machine, and it just pulls U$ 1 billion out of its pocket and buys a photoshop thingy???
I find this deal hard to understand. I think U$ 1 billion has just been efficiently moved from place A to place B and that's as much sense as I can make of it.
It's even worse than that. The $1 billion is largely in stocks from what I understand and parts of it are vested. This means that the stocks don't actually move from one place to another slowly over time. Further, this is not actually money. It's based on what people think the value of Facebook's stock is. That value can go up or it can go down.
Personally, I think the current state of valuing user data so highly is insanity. I suspect that this purchase will later be used as a prime example of another bubble, but this time a marketing bubble rather than a tech bubble.
Well, I can think of one conspicuous counter example from the world of banking - the RBS acquisition of ABN Amro for £49 billion with practically no due diligence and which almost destroyed RBS (which would had caused utter chaos had it collapsed).
I've seen companies spend millions on mainframe computers used for transferring text files around, which a handful of pc-sized servers could probably do just as well.
The "easy" money in the technology sector is something that should be seriously investigated IMHO. I think everyone who works with technology has seen their share of suspicious deals. The question to ask is often: who is providing the easy money, money which can be "wasted" as long as it produces a profit?
Facebook ran on investor money up until a short while ago(a short while in major corporation age, what, 2 or 3 years?).
I wouldn't be surprised if Apple bought Instagram. But Facebook is not even established as a blue chip, it's not a money printing machine, and it just pulls U$ 1 billion out of its pocket and buys a photoshop thingy???
I find this deal hard to understand. I think U$ 1 billion has just been efficiently moved from place A to place B and that's as much sense as I can make of it.