Facebook prospectus shows jump in users, fall in profits

Nobody learned a thing

In what we will in the future call the first dotcom boom and bust, lots of successful companies lost a lot of money by believing that having lots of users was a good thing. This was because you multiplied an arbitrary constant by the number of users, and it gave you a 'value'. Reality is it gives you a cost. The more successful YouTube it, the more it costs Google to run it, for instance. Anyway, lots of companies changed hands at stupid money because it was a (pretty flipping blatant) bubble. It turned out a registered user was not worth the $1000 'value' fantasists said they were.

Anyone remember Marconi? They put cash in the dotcom boom, now they are owned by the French company Thales. BT made £100/sec profit at one point, they spunked a load of it on dotcom nonsense. Murdoch's balls were $650M or something lighter for this thing very few people will remember as relevant 'MySpace' (GeoCities++). Friendsreunited seemed like a good buy for a once rich ITV.

Clearly we are much smarter now, and would never overvalue a company which could be irrelevant within a year if the tides turn (as fads/fashions do)! Me, I'm going back to pork bellies futures and tulip bulbs - at least you know your cash is as safe as houses.