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Wednesday, November 6, 2013

FROM THE DOTCOM ERA AND BEYOND, AMAZON TRUMPS ALL

According to GeekWire, a $1,000 investment in Amazon from the IPO would be worth $239,045. That is 239 times return on money staked.

eBay and Yahoo end up as great investment decisions. Google ends up as an OK investment decision. Comparatively speaking, LinkedIn ends up as a weak decision and Facebook ends up as a quite bad decision.





Now let's take those numbers above and truly put those numbers into perspective. Look at those surprises!


On a yearly basis since the respective IPOs, Google ends up being the second worst investment though yielding a bit more than 1.5 times Facebook. Yet, for years, the chatterheads on CNBC, Bloomberg and elsewhere on blogs have decried Yahoo! as a poorly run business while singing praises for Google.




What is the lesson here? Jeff Bezos and the succession of execs at eBay have proven the real money on the Internet comes from selling goods packaged in boxes along with brokering sales of goods packaged in boxes.



Social media fail to make good investments. The costs associated to run social media are high. Yet, in spite of growing revenues, revenues fail to exceed costs.


Look at Twitter. The kiddies who run Twitter never have been able to turn a profit in seven years! According to 

Bloomberg, in a recent filing, Twitter execs reported doubling revenue in its third quarter of accounting, yet those execs could only do so by quadrupling their losses.

All should be surprised even when professionals take over Twitter after the IPO, that Twitter ever turns a profit.


By wasting untold resources on G+, Google execs have drifted far from their model as a digital billboard by pushing ads on anyone's internet property through Doubleclick and AdMob. For the hundreds of millions Google execs squandered on G+ and G+ related acquisitions, these same execs could have added an alike functionality to Blogger for pennies per blog. Blogger already supports advertising welcomed by tens of millions of Blogger users.