Long Term Value of Trendiness?

I’ve written about Facebook before – I think it’s a great site.  And its growth has been phenomenal!  Kudos to the team there.

But, there is no doubt that Facebook benefits from being trendy & cool.  Unfortunately, trendiness and coolness are things that easily wane.  What happens when all the teenagers move to BiterBook or the next social-platform of the day?

Certainly everyone remembers that 10 years ago, www.netscape.com was the #1 destination on the planet.  And of course we all remember how hot Friendster was.

Obviously, I have no idea where Facebook will be in 5 years.  But, for any valuation measured in billions, you’d be crazy to invest.  Unless they’ve got staggering revenues, the risk of never seeing Facebook, or any company built on short term trendiness, return that much is just too high.

It would be interesting to see if AOL generated more than $4.2B in profits from the Netscape acquisition.  I don’t know.

Leave a Reply

Your email address will not be published. Required fields are marked *