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Raw Bytes Computer News KPBX FM 91.1 Spokane Public Radio National Public Radio Network Frank Delaney Producer Broadcast on Wednesday Morning 7:35 AM During Morning Edition Support Public Radio ! The Theater Of the Mind |
In
computer news this week
05/16/2012 Reasons not
to buy Facebook
Facebook is doing an IPO this week, and the one sure thing is
that its owner and longer term employees are going to get rich. The question
of course is will you as an investor get rich too ? In looking back at the pc industry, we all remember the dotcom bubble
of the late 1990’s when the internet was just starting, followed by all
the dot com crashes. Millions of investors suffered heavy losses, and many
dotcoms simply disappeared. In comparing Facebook to Microsoft, when Microsoft went public in
1986 they were an established company with several products dominating their marketplace, the cash cow of
which was msdos which they had developed for IBM but
licensed for themselves. They had
substantial international revenues coming in and an established world market
position. Their chief executives wore suits. Facebook is very different from Microsoft, beginning with its ceo who wears a hoody to potential
stockholders meetings. Where Microsoft had many established products in different
areas, Facebook’s main product is Facebook itself,
which anyone can join for free, and its whole revenue model is based on selling
ads on users pages. We are currently at the acme of the growth of social networking –
the concept that anyone can have a presence on the web and communicate with
their friends. Some of the unknowns, which we are just beginning to become
aware of, are the downsides of sharing too much information about yourself,
and the security risks involved with this social phenomenon The pc industry itself is fickle and littered with the ghosts of
companies that once dominated a marketplace, only to be replaced by newer
better software. The first dominant word processing program was one called WordStar,
which was replaced by word perfect, which was replaced by Microsoft’s Word.
In the spreadsheet marketplace, the application which launched
the pc industry was the spreadsheet program visicalc
which ran on an early apple computer and later ported over to the first
generation of pc’s, followed by Lotus 123, then Quattro Pro, and now
Microsoft’s excel. Back in the 90’s AOL had a big social networking area
where you could set up a profile and meet people world
wide. You had to pay to join AOL and there was an hourly fee for
usage. When social networking grew Myspace was once the dominant
leader, but fell by the wayside. Now Facebook is #1, but who knows what’s
coming down the line, in term of possible competitors to facebook –
twitter has been named – or totally new technologies which we haven’t
thought of; the better social networking mousetrap. You can do a google search for reasons not to buy Facebook and
you will find many articles written by professional investors
pointing out various other
red flags about Facebook, but my gut feeling is that like most thing related
to the pc industry. It’s a whole lot of hype and smoke, and not much
substance. For Raw Bytes This is Frank Delaney (C) 2012 MTA Micro Technology Associates http://www.mtamicro.com/kpbxmenu.html (509)624-7230 |
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