Comment by foxylad 2 days ago
Cory Doctorow has a compelling theory that the megatech companies have to appear to be startups, or else their share price reverts to normal multiples. Hence the continuous string of increasingly over-hyped "game-changing technologies" they all (not just Meta) keep rolling out.
VR, blockchain and LLMs have their value, but it's a tiny fraction of the insane amounts of money being pumped into these bubbles. There will be tears before bedtime.
> as long as there's a new new thing to replace it as the aspirational vehicle. Like any good mark in a con game, tech investors want to believe.
Yea, but it seems like the new new thing needs to get progressively bigger with each cycle, which is why I think the shell game is almost over.
They really can't overpromise much more than they did with the AI hype-cycle.
It feels like a startup valuation in that having a down round is...not favored by investors; I feel like having a step-down in promises would also be problematic.
> They really can't overpromise much more than they did with the AI hype-cycle.
While I agree that "replace all human labor" is already pretty high up there on the overreaching u/dis-topian promise list, there are still a few things left.
Perhaps the next dream to sell will be digitizing the minds of Valued Shareholders so that they can grasp immortality inside the computer.
Yup which is why I think that the bubble is going to burst but what's surprising to me is that a lot of normal folks might be hurted by this too in the sense that s&p 500 has really concentrated its holding into companies believing into AI and the hype train seems to be coming to an end and the bubble coming near its burst.
The economy could be doing really bad but the stock market can be doing good, they aren't direct correlation imo anymore.
It can take a long time for the stock market to actually be corrected but I know one thing and that is, bottom it would be corrected some day and maybe they would call it the bursting of a bubble
Nicely spotted.
I regard Meta and Google as ad agencies.
(I'm not smart enough to break out Amazon's and Apple's ad biz P/E separately.)
My quick spot check says Meta's P/E is more than "legacy" ad agencies and (much) less than Google's.
Just observations. I have no insights.
My opinion, based solely on vibes, is the online ad biz (Meta and Google) is more fraudulent than not. If true, than both are grossly overvalued, in that castles in the sky sort of way.
This may well be true, but my point is more that Facebook/Meta/Zuckerberg seem almost uniquely unable to turn the startups into great new businesses, when compared with the other big tech companies.
Amazon added cloud and prime, Microsoft added cloud, xbox, 365, Google added Chrome, Android, cloud, Youtube, consumer subscriptions, workspace, etc. Netflix added streaming and their own content, Apple added mobile, wearables, subscriptions.
Meta though, they've got an abandoned phone platform from years ago, a half-baked Metaverse that is being defunded, a small hardware business for the Quest, a pro VR headset that got defunded, a crypto business that got deprioritised, and an LLM that's expensive relative to open competitors and underperforms relative to closed competitors... which the tide appears to be turning on as the AI bubble reaches popping point.
> Facebook/Meta/Zuckerberg seem almost uniquely unable to turn the startups into great new businesses, when compared with the other big tech companies.
Really? Instagram, WhatsApp... the two most used apps & services in the world?
> Google added Chrome, Android, cloud, Youtube,
It's arguable how GCP is profitable, but chrome/android/yt are money-losing businesses if you exclude ad revenues.
Indeed, for big valley tech companies it's crucial to have a new business developing in the wings which has plausible potential to be the "next big thing." They're desperate to keep their stock price from being evaluated solely on trailing twelve month revenue, so having a shiny, ephemeral hype-magnet to attract inflated growth expectations is essential.
So far, it appears the psychology of investors allows the new thing to fail to deliver big revenue and be tacitly dropped - as long as there's a new new thing to replace it as the aspirational vehicle. Like any good mark in a con game, tech investors want to believe.