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back to article CAPITALISM without PROFITS - Welcome to the Instagram Era!

Doubters, shut your mouths now - and nail them shut. Two great pieces of news from the US have validated Silicon Roundabout as the pulsating heart of a new British economy. And a whole new way of doing capitalism. Firstly, Facebook bought Instagram for $1bn. Instagram sounds like a coke dealer who turns up very quickly indeed - …

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It shows how bad things are ...

... I had to read it twice to make sure it wasn't serious.

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Unhappy

@John H Woods Re: "It shows how bad things are ..." Hmm, yes - almost scary.

Especially this bit:

"We can't have a dynamic, competitive, self-regulating Trust Economy if 20th Century fraud regulation is holding us back."

You only have to delete one word...........

"We can't have a dynamic, competitive, self-regulating economy if 20th Century fraud regulation is holding us back."

..........and you get a summary of the kind of line the "Directorati" punt out on a regular basis when comes to any form of regulation that requires anything of them at all.

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Re: It shows how bad things are ...

Err, Goedemorgen, John H Woods,

And man, are you in for a surprise whenever you realise it is a perfectly serious piece in a major novel peace plan .... and in such transparent NewSpeak Code, is IT essentially and ESPecially effective for that new breed of selfless entrepreneur into Virtual Turing Machine ProgramMING BetaTesting and AIMentoring and Monitoring of those Stealthy Astute Systems and SMART IntelAIgent Models with NEUKlearer HyperRadioProActive Drivers CodedDXSSXXXX.

And that, paradoxically, shows you just how good things are and how good IT works.

amfM pinging Bong Ventures re a Titanic Studio Portfolio of Great Game Works and Magical Mystery Turing Dead Head AIdDVentures. Sticky White Gum Novelties that Lead Universally and somewhat Unilaterally in and with a Highly Critically Selective Collective of Advanced IntelAIgents in LOVE with CHAOS ....... Live Operational Virtual Environment with Clouds Hosting Advanced Operating Systems.

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Indeed, I think the gist of the sentence means that, going forward, we need 21st Century fraud.

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Anonymous Coward

Re: It shows how bad things are ...

Ah, so it was supposed to be a joke. That's why I never really liked the Onion much. It's just too close to what the evangelists push on a daily basis for me to find it funny.

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Re: It shows how bad things are ...

I'd only read it once, and was still wondering :)

That said having only just watched The Apprentice on iPlayer catch-up might also be clouding my judgement on business matters at the mo...

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best piece I've seen at El Reg

when is the book appearing on clickbank ? just got a great deal on a billion ultra targeted verified email addresses for only $97 .. usually $1995 !

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Holy crap!

I had to re-check the URL half way through the article to make sure I hadn't gotten redirected to The Onion. :)

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While I certainly wouldn't defend Instagram's ridiculous $1bn valuation, I should point out that although a company might not be making profit, nor would ever make profit in its current form; that doesn't necessarily mean that there isn't value in the company.

Nor does it mean that the company isn't an attractive takeover target.

A larger or more established company can make use of technology or a customer base in a way that the original developer cannot exploit to make profit.

This is perfectly enshrined in capitalism.

Instagram weren't bought out by a pension fund or investment group looking to garner long term profits from the company, they were bought by a large existing social networking player with ridiculous amounts of cash lying around whose only long term profitability lies in innovation (think how myspace didn't innovate/improvie/evolve quickly enough and died out inversely fast).

Though the price tag is off, I think Instagram itself is a good acquisition for FB.

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Anonymous Coward

"This is perfectly enshrined in capitalism"

Along with Boom 'n Bust, fraud, regulatory capture, corruption, poverty and the quaint habit of continually reinventing the idea that perpetual motion really is possible if only you juggle the numbers enough.

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hmmmmm

step away from the koolaid, or failing that try to take more water with it

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That's the point

The price tag is WAY, WAY off.

Come on! This P.O.S. 18-month-old-no-revenue-no-tech company is worth more than the NY Times (among, literally, thousands of other substantive, revenue-generating companies!)?

Put that $1B in a fund and help a few thousand very smart, very motivated entrepreneurs, run them side-by-side with Instagram and let's see who provides value. Geez, you might even get a photo sharing company who can give you a filter or two.

The real - and only - test is will this purchase give them back their billion within (even) the next decade? Never.

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Anonymous Coward

I don't get instagram...

Its like an app for dump people...

So lets see what Instagram does...

Take a photo, Yep my phone does that.

Choose a filter, yep my camera app does that

Upload to Instagram, nope but why?

Share, yep phone does that..

SO basically its somewhere to upload photos to instead of your already used networks, and then tell those same networks you've uploaded a photo...

RIGHT.....

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We are *so* heading for another dot com bust.

Good fucking riddance I say.

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Anonymous Coward

But but but...

It's different this time!

/sarcasm

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Re: But but but...

Yes you are right, this time it will take the rest of the economy with it.

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I'm loving these spoofs. Another hit from the Bong!

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Makes your pictures look worse!

> It makes your iPhone photos look like they've been flushed down the crapper

I heard Instagram being discussed on "You & Yours" on R4 today. "So, basically, it takes your photos and makes them look worse?" said an incredulous Peter White. Hilarious.

(For non-R4-listeners, Peter White is famously blind.)

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Anonymous Coward

"it takes your photos and makes them look worse?"

"it takes your photos and makes them look worse?" said an incredulous Peter White.

Peter White's eyes may not work, but comments like that (and others from him) show he can see reality better than most of his "journalist" colleagues.

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Move over Warren Buffett

This guy really gets it. He is the VC equivalent of the BOFH. We need more. Regularly

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Anonymous Coward

You're out of touch, Mr Bong!

All that talk and no mention of the 'New Aesthetic'. Don't you know that's what everyone in the 'ditch is talking about this week. Instagram is sooo last month...

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Brilliant.

I feel a Nobel prize on its way...

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Big Brother

Holy bong, this bings it!

It's just because money is cheap, credit is easy and no-one will ever pay anything back.

In a world where 3 trillion dollar can be injected into the economy and the interest rate be kept below zero for years and years without a single person setting himself on fire in shame and desperation on the front porch of some parliament, anything can happen.

Let's roll!

As for the 20th century fraud squad. What can you do when government is the one performing the fraud? In fully daylight? And it is DEFENDED for doing so?

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$28.57 per user

Facebook paid $28.57 per user. Sure, that's cheap per user. But if a user is paying zero, then what is the worth of the user? Is Facebook hoping to own the copyrights on all of those bad photos? And if the users will happily abandon the app for something else now that Facebook snagged it, then what's the value?

Isn't the value going to the wireless carrier who is charging users for the excess data bandwidth used due to crap apps like this?

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Anonymous Coward

Re: $28.57 per user

Massive tax write off or does FB manage to monetise it's users to that sort of degree anyway? Or both?

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Facepalm

Re: $28.57 per user

correction....

to accurately calculate that metric you need to subtract the number of users that were signed up to both services before the buy out, if they were fb users already, then even by the fucked up economics of the social media IPO bubble then those guys are already contributing their last full measure to the FB party, so you cant count em 2wice.

given the type of service that instagram offers, and the usual objections that prevent people taking up an FB account in the first place, i'd caluculate that fb paid approximately $1,000,000,000 per new user.

There! fixed it for you.

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I wonder how many...

I wonder how many investment bankers would have believed you that if you had made a better photoshop.

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Joke

Bing...

...probably would have been more of a hit, had M$ named it Bong.

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Undoubtedly the greatest regret of satire sites all over the Internet.

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Awesome piece...

...indeed - I'd like to see more from Mr Bong - seriously, is it possible to make it into a monthly column?

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Pint

Re: Awesome piece...

More than that, any chance of doing some standup? Sorry, I meant to say any chance of doing some exclusive group mentoring and inspirationeering? In a place that serves beer, obviously!

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Awesome piece...

...indeed. :) I'd like to see more of this - seriously, is it possible to make it into a monthly Bong! column?

PS: "Black Swan" was a great book, I loved it but I'd totally buy "Capitalism Without Profit" too...

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What's the real story?

Two thoughts strike me as plausible :

1) Facebook knows that to maximise its IPO value it needs to get as many people aware of the fact that it's happening - to build maximum hype - and I'd say they've achieved that very nicely with the Instagram purchase.

2) Haven't seen it mentioned anywhere, but I wouldn't be surprised if the same V.C. are behind both Facebook and Instagram, or if not the same V.C. , then the same backer is behind the V.C. This means the money would basically just be going in a circle raising P.R. It also wouldn't surprise me if it was some meaningless stock swap.

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Anonymous Coward

From the link:

>"A selection of our insights on innovation, neurology, and entrepreneurship."

C|N>K lolz

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Awsome!

Classic!

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Trollface

Silly me...

I was about to buy a new SLR, I must get an Iphone and instagram instead!

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Mushroom

Oh, god...

...I was holding out hope that because the rest of the article was humor, that 'Seedrs' was some kind of spoof on absurd, formulaic, self-consciously trendy startup names.

Alas.

I mean, really, 'Seedrs'? REALLY? For Christ's sake, people, come up with a new trope! Removing the last vowel from a given word is the 'tramp stamp' tattoo of startups - it was kinda cool the first time, but only because the girl was hot, and even so it was kind of disturbing. But when everyone's got it? It just makes you look idiotic!

I mean, imagine if famous people had done this. We wouldn't have Jesus - we'd just have Jess. And nobody's going to worship Jess. It's too normal.

Hitlr makes a stupid name for a dictator. David Camern looks silly for a milquetoast would-be-dictator.

And what if real companies did this? Microsft? Oracl? Sn? You see how absurd this all is?

They say that Hollywood is out of ideas, but seriously - is this calculated? Is it just impossible to get funding for your startp unless you have a stupid fucking name?

"OK, gentlemen, it looks like it's down to MP Parallel Systems and Blumpr. Thoughts?"

"Well, I think it's obvious. Blumpr has no product and no revenue, but they obviously "get it". Who the hell are these Parallel Systems guys anyway? Tell them to come back when they know something about business."

...or is it just a profound, crippling lack of imagination, the same kind that leads people to name their children things like "Kandi" and "Jaden"? But those people aren't trying to sell their kids for a billion fucking dollars!

At least Instagram has an interesting, novel, descriptive name. Maybe that's what makes them valuable. My product: Startup names that don't make you look like a fucking 12-year-old.

I mean, really - isn't it enough that we had to suffr through a bunch of whiney-ass pop rock bands that glommed on to this even before the silicon valley tweens did? Staind! Haha! I get it! Hey, nobody buys your albums anymore, maybe you can reinvent yourselves and give away an app that lets you share specially modified photos of your eyeballs! Or something! It really doesn't matter!

Thanks. I'll be here all week - mainly because my neck snapped back so hard when I read 'Seedrs' that I can't feel anything below my waist. Seriously, I can't. And I'll never be cured, probably because nobody will give funding to medical startups since they aren't called stuff like 'Bootr'. You know I invented some stupid '*r' names once, trying to make them as stupid as possible, and half of them were actual companies?

Oh my god, the pain! I can feel my legs again! The ranting worked! Excuse me - I'm going to drag my ass upstairs and drink a gallon of windshield washer fluid. It's good to -20c.

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(Written by Reg staff) Silver badge

Re: Oh, god...

Comment of the week right here.

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Re: Oh, god...

If it's any comfort to you; imagine how the people at Seedrs feel about it. Oh..... wait a minute.

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On the other hand

If Apple took this approach then instead of the iPhone they'd be claiming to have invented the Phone...

Which, given their recent legal positions, doesn't seem like such a huge stretch.

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IT Angle

Re: On the other hand

Well, we're talking company names, not product names. 'Appl" sounds really idiotic, doesn't it? Might as well call your company "Flash In The Pan". 'Apple' may be a little odd, but it was able to become a name of a company, whereas stuff like 'flickr' and 'seedrs' are names that have a company attacjed only because they have to in order to exist. It's like with school administrators - the students are a distraction. Companies exist to service their trendy names, as if the business plan revolved around which two-sylable "*e?" words were available as dotcoms.

Question of the day, though - is this better or worse than the 'ant / ent' virus that roared through Big Tech a decade ago? Agilent? Connexant? Defendant? Hell, I seem to recall some company mentioned here called something like 'Qualient', or something equally assinine. I checked twice to make sure it wasn't a joke. I mean, what Harvard MBA pisshead decided it would be a great idea to throw out a half century of respect and reputation in exchange for... What? I don't know!

At least startup starter-uppers have the excuse of youth and... Well, youth. But HP? Christ, HP should know better. What they did is like Rome renaming the Coliseum to 'daDopeArena'.

Anyway, products are a different ball of fish. Apple managed to, via familiarity maybe, make "i*" names -work-. Everyone ridiculed the name 'iPad' when the product launched. It was guaranteed that not a day would go by without a technology-as-sanitary-napkin joke. But here we are... The same goes for Nintendo's Wii, whose name was pronounced a death sentence. But here we are.

Company names, though, don't seem to fix themselves as they become better known. IBM might have managed to pull off the 'PC jr.' if it hadn't sucked so much, but it'd be hard to take them seriously a a comany if they were called "Comprz".

Anyone want to bet that's a real name? :/

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Anonymous Coward

Re: Oh, god...

It was all started by a Wankr

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Anonymous Coward

Rahul Sativa?

Bong Ventures?

Six mars bars, a pack of red rizla and yeah, those.. no ,those, yeah, the crispy bacon flavour ones..

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Go

"post profit enterprises"

My favourite phrase in the whole article :-D

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This is kind of .com bust 2.0, but...

at least they are honest in their accounting about producing no profits and little revenues. If they were a financial services company, they would be making $4 billion in profits a year... with $76 billion in off book debt and liabilities.

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Just like a Matt Asay piece

...but (sort of) funny.

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Alien

I thought is was...

April 1st. Nope. Not an April fools joke then.

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Re: I thought is was...

Nope, just a regular sort of joke like the BOFH.

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Just wondering ...

... if and when the book will be on sale in the Reg shop. I want to get down with the new paradigms.

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Anonymous Coward

It shows how bad things are ...

... I had to read it to the very end of the first paragraph, and still wasn't sure, at which point I realized I'm past the first paragraphed (cliffhanging), I-panicked, I-grabbed my i-thingy, I-downloaded appropriate app to help me regain my I-nnermostself balance (half-price, introductory offer, click here), and now I'm at piece.

so what was that article about? Cause I can't focus my brain, just tell me where to click and do you take paypal?

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