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“For everything there is a season”

By 5 June 2010 3 Comments

(So says Ecclesiastes)

In a post earlier today, George comments on the silliness of assuming that a company’s stock price should rise inexorably and that if it does not then it must be the CEO’s fault.

Indeed, and it is elementary investment economics that the price of a stock shoots up only if there is a surprise; when things go as anticipated, the future is quickly discounted and the stock price rises only as a function of earnings and interest rates.

Companies also have seasons, trees don’t grow to the sky, and someday even mighty Google will turn into just-another-company. As tech expert Paul McWilliams notes on Next Inning (proprietary):

Of course, GOOG doesn’t have it made in the shade either. As GOOG has grown in value and power, consumers are starting to see it as the new “evil empire” rather than what was once perceived as a nice fuzzy critter that can do “no harm.” While we all like “free” stuff, we’re learning that free comes at a price and, in the case of GOOG, the price is not only a bombardment of advertising; according to numerous reports, it also includes the collection of copious personal information without our direct knowledge. It’s this knowledge that makes the GOOG advertising model powerful and if regulators decide to place restraints GOOG’s ability to gain the knowledge to target advertising, its model will be threatened.

Since I think that the long-term health of content production depends on having it paid for by users rather than sponsored by advertisers, I await with eagerness for the masses to tire of being required to watch another damn commericial everytime they want to click on something, and to realize that they would rather pay a few cents to be commercial-free.

Surfers of the world, unite!

3 Comments »

  • George Ou said:

    It’s sad how many people respond with knee jerk reactions to stock prices. I subscribe to the saying:

    “When people are greedy, I get scared. When people get scared, I get greedy.”

  • Inyou Crash said:

    Warren Buffet or as any stock market analyst would know as, the man to watch with regards to the market.

  • sterlace said:

    When the mechanism of skipping the commercial by paying a small fee is significantly faster than the commercial itself, it can be done on a case-by-case basis and not just as a total site subscription. That’s what I’m looking forward to seeing somebody develop.