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Wednesday, February 9, 2011

Facebook facing a Dot Com Bust?

In a split second (in internet time) the inventors of the modem or at least the most popular component of the device that hook you into cyberspace in the last century, closed down. Hayes.

They think they know what is coming. But they are wrong. Pass or fail. Or they pass. And then failed.

The Facebook Effect: The Inside Story of the Company That Is Connecting the World   Facebook Marketing: An Hour a Day   The Accidental Billionaires: The Founding of Facebook: A Tale of Sex, Money, Genius and Betrayal
CREATIVE started the "sound" and soul of the Personal Computer. No more beeps - and such a great leap forward into music, sounds, effects, 3D surround. They were the giants. Creative stocks traded at over $30 SGD. Today - not anymore.

So is Facebook facing a Dot Com Bust? Or is Google facing the Dot Com Bust? Or perhaps even more likely Microsoft? Their stranglehold on the operating system front is lapsing, which Office is having a war with the open system OpenOffice camp. How can Microsoft stay relevant, and not obsolete?

Then next is how your investments in IT stocks will ride until you say "sell"?

The answer is vague. Let's compare apples with apples. Trading and buying online. So two candidates here are Amazon and eBay. Many years ago, Amazon was a super power. They sell books. Then CDs. Then almost everything that people care and feel safe to purchase online. Then eBay overtook Amazon because of obvious reasons. eBay doesn't have a warehouse nor need a warehouse. Amazon has huge overheads - warehouse, security, shipping, trucks.

eBay simply charges fees. A service fee when you sell a product in their marketplace. A fee when you list an item for sale. Wow - that's a sure winner.

Forward a few years - the story again moved 180 degrees. Amazon is moving faster and growing and saving cost. Implemented some huge cloud system that attracted many more corporate users.

eBay is stymied by it's own success. High fees making sellers leave. Unfair one-sided help for buyers, and pushing sellers away, who actually are their customers because only sellers pay fee to eBay. Forcing users onto Paypal which is part of eBay which charges yet another transaction fee. Implemented more draconian laws to subjugate small players, and raising fees!

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