Duff McDonald of Fortune today calls "bubble" on all the social media companies that have been getting IPO buzz lately, the latest of a stream of journalism that is itself a fad.
In McDonald's defense, he shows his work with a well-written, well-argued article about why Pandora, Groupon, Facebook and their peers can't possibly be worth what investment banks and private equity investors seem to think they are.
How many basic advertising plays are people going to get suckered into buying just because they're on the Internet? Google, fine. But that company is like a pure distillation of advertising in the 21st century. The rest are just derivative. Facebook might really be selling data about me six ways from Sunday, but that doesn't make it the greatest investment opportunity on earth. Certainly not one worth 25 times revenues. And Twitter may help foment revolution, but that doesn't mean its ever going to make a meaningful amount of money. I'm not a buyer.
Still, this is a story that has been written so many times, did it need to be written again?
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