It's not one datapoint. Instagram, Snapchat, WhatsApp. Three smallish companies, three mind-boggling valuations. I don't think it necessarily indicates that there is a bubble, but it does sound like funny money.
The key thing to look at to see if it's a bubble is IPOs. And as far as I can see, good companies are the ones IPOing successfully, and less stellar companies (Zynga, Groupon) are getting punished.
Instagram is a good example. As soon as Facebook bought it, the teens started switching to Snapchat, etc.
The problem for Facebook is that to be profitable it needs to connect and make visible things that people don't want connected or made visible.
huh? AFAIK I've heard nothing of the Instagram exodus, and its actually growing. Are we sure that Instagram is actually in a bad spot, or are we just praying for doom and schadenfreude?
These types of financial articles are the worst because they are unable to accurately predict the future of new markets. They're the types of articles that you read a decade later and kind of pat on their head.
Skepticism of an industry is one thing, but most of the time that skepticism is not coming from any type of informed or even historically accurate perspective. It's just not understanding what the current market price of things is. Which is pretty dangerous for a newspaper article writer.
Instagram was a great buy for Facebook (and yet people questioned it at the time).
Viber sold for $900M, and no one seems to complain. WhatsApp is much more popular & growing faster.
When I moved and they had an ancient thermostat it was easy to pay $50 more than the above just so I could control it with a phone. Setting the program is much, much easier than the Honeywell.
I think they bought best for the team as much as the product and I hope nest does sprinkler systems next in their pursuit of solving first world problems.