Continuations

There are a lot of posts worth reading about the potential impact or lack thereof of a possible deal between Microsoft and News Corp (and maybe other news sources as well), including Danny Sullivan, Jeff Jarvis, Andrew Parker and others. But one thing that I have missed from everything I have read (and it may well be that it’s there and I missed it) is what this is truly all about: the immense competitive pull of Google’s amazing profits! The big challenge for businesses with network effects ...

We all know that valuations in the private markets are high at the moment and generally ahead of public market valuations. There are multiple reasons for this including principal agent issues in venture capital and most importantly the potential for exponentially increasing returns in network effects businesses. The one I want to focus on today though is a potentially wrong assumption about long run profitability. Craigslist has not invested in a native mobile experience and as a result there...

The stock market indices are above their pre financial crisis highs. One interpretation of this is that the financial crisis was just that: a crisis of the financial sector that left the rest of the economy largely untouched. Another interpretation is that we are simply looking at the results of way too much cheap money provided by the Fed. The latter is supported by a chart that I saw yesterday for the first time which shows the Dow divided by the price of gold. That chart is essentially fla...

The demand for books, music, news, TV, phone calls is constrained by the time that people have. In a mature market (e.g., the US) that time is growing at best at the rate of population growth (low single digits), but in reality is likely to be shrinking as other online activities (e.g., social networking) take up time. The supply for all of the above, however, is increasing by one or more orders of magnitude, as anyone can be a publisher and as the cost of bandwidth has plummeted. The basic m...