Facebook Inc.

(15-07-2017, 11:37 AM)weijian Wrote: Ben Thompson doesn't seem to agree. He thinks the future for publications in general will be "paid subscription" - meaning that although the days of large-scale monopolies and above-average ROA by newspapers are definitely over, content will still be the key decisive factor to make (abeit less) money - So things like local news, or specialized publications like fishing/motoring magazines (Men's Health anyone?) will continue to be profitable and thrive accordingly.

https://stratechery.com/2017/publishers-...ublishers/

I recalled, the late Mr. LKY said, SPH news media will survive, with similar reasoning.

Subscription is just a part of the revenue for publisher. Advertising revenue is another big part of revenue. Google-Facebook dominate the digital platform for news, and also taken the lion share of advertising revenue. Data (both in quality and quantity) has given both Google-Facebook a great competitive advantage, over other publishers.

(share a view)

I will put this in FB thread, since there has been some discussions since it was revealed that FB's targeted ads was used by "Russian agents" in the last US Presidential Election. So all these "revolutionary" tech companies are actually just "old wine in new bottles"? - Should Google/FB be a media company? Uber be a taxi company? and AirBnB actually in the hotel business and so all of them have to follow the rules of their traditional rivals.

Break Up the Tech Giants? No, Just Level the Field

Facebook, Google and Uber should be held to the same rules as their older rivals.

People in the U.S., not just in the European Union, are finally getting worried about tech sector leaders' market dominance and the political power it confers. Unfortunately, the solutions gaining traction are the kind of anti-monopoly regulations that address the symptoms of the problem, not its root cause.

https://www.bloomberg.com/view/articles/...-the-field

(19-09-2017, 09:49 AM)weijian Wrote: I will put this in FB thread, since there has been some discussions since it was revealed that FB's targeted ads was used by "Russian agents" in the last US Presidential Election. So all these "revolutionary" tech companies are actually just "old wine in new bottles"? - Should Google/FB be a media company? Uber be a taxi company? and AirBnB actually in the hotel business and so all of them have to follow the rules of their traditional rivals.

Break Up the Tech Giants? No, Just Level the Field

Facebook, Google and Uber should be held to the same rules as their older rivals.

People in the U.S., not just in the European Union, are finally getting worried about tech sector leaders' market dominance and the political power it confers. Unfortunately, the solutions gaining traction are the kind of anti-monopoly regulations that address the symptoms of the problem, not its root cause.

https://www.bloomberg.com/view/articles/...-the-field

Yes, the large Tech companies (Amazon, Google, Facebook etc) today are Monopolies hidden in plan sight, with insurmountable moats (network effect), that earns incredible return on tangible assets. The kind that Warren Buffett loves so much. Unfortunately, since they also spend the most on lobbying, it would take someone that is incorruptible to be able to break them up. The time will come someday, sooner rather than later, not with the current administration though.

I see many parallels between Big Tech today with Standard Oil in the early 20th Century.

(19-09-2017, 11:25 AM)Wildreamz Wrote:

(19-09-2017, 09:49 AM)weijian Wrote: I will put this in FB thread, since there has been some discussions since it was revealed that FB's targeted ads was used by "Russian agents" in the last US Presidential Election. So all these "revolutionary" tech companies are actually just "old wine in new bottles"? - Should Google/FB be a media company? Uber be a taxi company? and AirBnB actually in the hotel business and so all of them have to follow the rules of their traditional rivals.

Break Up the Tech Giants? No, Just Level the Field

Facebook, Google and Uber should be held to the same rules as their older rivals.

People in the U.S., not just in the European Union, are finally getting worried about tech sector leaders' market dominance and the political power it confers. Unfortunately, the solutions gaining traction are the kind of anti-monopoly regulations that address the symptoms of the problem, not its root cause.

https://www.bloomberg.com/view/articles/...-the-field

Yes, the large Tech companies (Amazon, Google, Facebook etc) today are Monopolies hidden in plan sight, with insurmountable moats (network effect), that earns incredible return on tangible assets. The kind that Warren Buffett loves so much. Unfortunately, since they also spend the most on lobbying, it would take someone that is incorruptible to be able to break them up. The time will come someday, sooner rather than later, not with the current administration though.

I see many parallels between Big Tech today with Standard Oil in the early 20th Century.

I think certain industries tend towards natural monopolies, especially in industries where the marginal costs of serving an additional customer are next to zero.

In my opinion, companies should not be penalized for achieving a commanding market share, provided it is achieved through fair competition and they do not engage in anti competitive behavior. Having a wide "moat" or network effects can help insulate a company from competition, but i don't think can be seen as anti-competitive in themselves. The problem arises when companies leverage their commanding market share in the market they dominate to stifle competition in adjacent markets. A recent example would be Microsoft using their commanding market share in the computer operating systems market to gain unfair advantages in the browser or applications market through bundling.

With regards to the parallels with Standard oil, Standard Oil did engage in anti competitive behavior. Standard Oil extracted rebates from the railroads for each barrel of oil shipped, whether the barrel be from them or their competitors. For a more recent example of such behavior, Microsoft offered discounts to large PC manufacturers if they agreed to pay licensing fees to Microsoft on every PC shipped, whether or not Windows was installed.

@Clement

Well, I would single out Amazon with anti-competitive behaviour. I believe the main purpose of them operating at 0 profits or a loss is solely to drive out their competitors. This is just old school predatory pricing. Correct me if I'm wrong. And with regards to expanding into adjacent markets (although I don't think this is necessarily Anti-competitive), I think Amazon is the poster child of that strategy, using the profits of their AWS business to subsidise their predatory pricing elsewhere (eg. their e-commerce business).

Facebook also has the knack of buying up their younger competitors (Whatsapp, Instagram) or out-compete them with similar offerings (Snapchat).
https://www.vanityfair.com/news/2017/08/...con-valley

IMHO, I would say Facebook is really walking a fine line, but still competing within the boundaries of ethical conduct. After all, they win by out-innovating Snapchat, and offering better products (Instagram Stories); and not, for example, by cutting off Snap's access to customers, or opportunities to operate at a profit.

(vested in Facebook)

Hi Wildreamz,

I think it is difficult to draw a line between price competition and predatory pricing. Has Amazon crossed that line? Most legal tests have predatory pricing as selling products or services below average variable or marginal costs, which i doubt Amazon is doing.

As to Facebook, i think the market for "eyeball hours" has not been clearly defined. As such, i think it is difficult to gauge the impact of these acquisitions on the competitive landscape.

(19-09-2017, 05:38 PM)Wildreamz Wrote: @Clement

Well, I would single out Amazon with anti-competitive behaviour. I believe the main purpose of them operating at 0 profits or a loss is solely to drive out their competitors. This is just old school predatory pricing. Correct me if I'm wrong. And with regards to expanding into adjacent markets (although I don't think this is necessarily Anti-competitive), I think Amazon is the poster child of that strategy, using the profits of their AWS business to subsidise their predatory pricing elsewhere (eg. their e-commerce business).

Facebook also has the knack of buying up their younger competitors (Whatsapp, Instagram) or out-compete them with similar offerings (Snapchat).
https://www.vanityfair.com/news/2017/08/...con-valley

IMHO, I would say Facebook is really walking a fine line, but still competing within the boundaries of ethical conduct. After all, they win by out-innovating Snapchat, and offering better products (Instagram Stories); and not, for example, by cutting off Snap's access to customers, or opportunities to operate at a profit.

(vested in Facebook)

Currently I would say Amazon's business is just in providing a platform to enable product sales to customers at the best prices possible. Other than the Amazon Echo speaker, Fire Tablet, Fire TV and kindle ebook, Amazon doesn't really have any other product lines.

If you shop on Amazon you will see that for many products, there are other small retailers using their platform to sell products. AFAIK Amazon actually started out as an online bookshop and managed to outcompete traditional retailers as they did not have the big staff cost/store rental overheads to contend with. 

Much like Ebay which started as an auction site but where even big name retailers can partner and list products for sale there. 

Another upcoming monster would be Netflix where it has used Online streaming/media/subscription model to outcompete video rental stores and is also now evolving into a marketplace / platform for media which may end up expanding into electronics retail. They are also making their own movies/drama.

So for big retail, the progression has really been shopfront -> online sales -> online marketplace platform/portal. once they get to marketplace platform level size, price competition is no longer an issue, most of the revenue will come from listing fees/commisions/ads etc as they let other companies use their platform.

I may be posting a slightly out of line/political/ out of topic question here.

It is interesting that people have highlighted how predatory pricing is anti competitive and "unethical". However, how about (i) being a monopoly or (ii)"collaborating" with the remaining two competitors of the same industry to maintain prices and earn a high margin from the consumers of the local market? Is this ethical business practice to start charging high prices to consumers for necessary services to sustain profits given the monopoly in essential services.

<maybe some members will know which local companies I am referring to>

(20-09-2017, 01:35 PM)CY09 Wrote: I may be posting a slightly out of line/political/ out of topic question here.

It is interesting that people have highlighted how predatory pricing is anti competitive and "unethical". However, how about (i) being a monopoly or (ii)"collaborating" with the remaining two competitors of the same industry to maintain prices and earn a high margin from the consumers of the local market? Is this ethical business practice to start charging high prices to consumers for necessary services to sustain profits given the monopoly in essential services.

<maybe some members will know which local companies I am referring to>

Hi CY09,

I think your comment applies more to oligopolies and price fixing, which have historically not faced as much legal scrutiny as compared to actual monopolies.

I think the evidence of price gouging in monopolistic markets is rather mixed. Monopolies formed by market competition, whether fair or unfair, do not always display price gouging tendencies. Standard Oil and Microsoft, the 2 most famous monopolies in history can hardly be said to have gouged their customers after achieving their commanding market shares. In fact, the evidence is that consumers in their markets did benefit significantly from product standardization and lower prices. As for monopolistic markets formed by government rules, market exclusivity or intellectual property protections, i would expect a much clearer picture of price gouging of consumers to emerge.

Peter Thiel Sells 73% of His Remaining Stake in Facebook

By Tom Metcalf
November 23, 2017, 12:24 AM GMT+8

Billionaire Peter Thiel, an early investor in Facebook Inc., sold 73 percent of his stake in the social-media company this week.

Thiel, a member of Facebook’s board, sold 160,805 shares for $29 million, according to a regulatory filing Tuesday.

The transactions are the latest in a series of sales in recent years that have left Thiel, 50, with 59,913 shares valued at $11 million as of 11:21 a.m. in New York.

Facebook shares have surged 58 percent this year through Tuesday, adding $25 billion to co-founder Mark Zuckerberg’s fortune and making him the world’s fourth-richest person with $74.9 billion. Thiel has a net worth of $3.2 billion, including a stake in data analytics company Palantir Technologies Inc., according to the Bloomberg Billionaires Index.

More details in https://www.bloomberg.com/news/articles/...ning-stake