Comment by const_cast

Comment by const_cast 4 days ago

In Zuck's defense, it's not just him, it's the entire American school of business.

They never learn. GM, GE, RCA, you name it. They always want to make more money now now NOW. They don't understand they're taking on a metaphorical loan. They don't understand the interest they have to pay.

It's the ultimate greedy algorithm. Just make the decision that makes the most money right now, every time, over and over and over again. Don't look at anything else.

scheme271 4 days ago

They know, it's just that most of the people will be gone before the negative effects become apparent. Most senior people are only going to be around for 7.2 years so if they optimize for short/medium term benefits and cash out, the long term consequences won't affect them.

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thephyber 4 days ago

What makes you think “they don’t understand the interest they have to pay”?

They are optimizing for short-medium term profits. The people there in the early days pull the ejection code when the “interest” is due. The company coasts until some private equity runs the numbers and realizes the parts are worth more than the whole.

This is capitalism. You are using “interest” (a finance term) seemingly in a moral / ethical critique. If so, use a moral / ethical term instead.

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frollogaston 4 days ago

Corporate valuation isn't about short-term thinking. It's actually all very long-term. Plenty of companies are not paying out all their profits to shareholders, and their valuation is entirely based on expectation that it'll happen in the distant future and the discounted perpetuity value will equal the initial investment, probably after the current investors are dead.
There are still plenty of vulture investors who find a way to trick the market in the short-to-medium term. I'm not convinced Facebook is a case of that, even though I hate what they do.

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pyuser583 4 days ago

It really about interest rates. Higher interest rates means more immediate revenue needed.

Social media was fueled by a decade of low interest.

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ironmagma 4 days ago

The interest rate "right now" is only relevant if you are playing a short-term game.

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grugagag 4 days ago

They need not learn, they do as they’re primed, to go for profit, squeeze and profit, profit and profit some more. Then profit even from the dead husk on the way out. That’s the hyper capitalist lifecycle of a business product.

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