[foxylad]

Cory Doctorow has a compelling theory that the megatech companies have to appear to be startups, or else their share price reverts to normal multiples. Hence the continuous string of increasingly over-hyped "game-changing technologies" they all (not just Meta) keep rolling out.

VR, blockchain and LLMs have their value, but it's a tiny fraction of the insane amounts of money being pumped into these bubbles. There will be tears before bedtime.

[mrandish]

Indeed, for big valley tech companies it's crucial to have a new business developing in the wings which has plausible potential to be the "next big thing." They're desperate to keep their stock price from being evaluated solely on trailing twelve month revenue, so having a shiny, ephemeral hype-magnet to attract inflated growth expectations is essential.

So far, it appears the psychology of investors allows the new thing to fail to deliver big revenue and be tacitly dropped - as long as there's a new new thing to replace it as the aspirational vehicle. Like any good mark in a con game, tech investors want to believe.

[ncallaway]

> as long as there's a new new thing to replace it as the aspirational vehicle. Like any good mark in a con game, tech investors want to believe.

Yea, but it seems like the new new thing needs to get progressively bigger with each cycle, which is why I think the shell game is almost over.

They really can't overpromise much more than they did with the AI hype-cycle.

It feels like a startup valuation in that having a down round is...not favored by investors; I feel like having a step-down in promises would also be problematic.

[jeremyjh]

Or every investor just expects the other investors will fall for this, but the result is the same: number go up so buy more. It could be no one really falls for it at all.

[unmole]

> Cory Doctorow has a compelling theory that the megatech companies have to appear to be startups, or else their share price reverts to normal multiples.

Meta's P/E is about the same as S&P 500.

[specialist]

Nicely spotted.

I regard Meta and Google as ad agencies.

(I'm not smart enough to break out Amazon's and Apple's ad biz P/E separately.)

My quick spot check says Meta's P/E is more than "legacy" ad agencies and (much) less than Google's.

Just observations. I have no insights.

My opinion, based solely on vibes, is the online ad biz (Meta and Google) is more fraudulent than not. If true, than both are grossly overvalued, in that castles in the sky sort of way.

[danpalmer]

This may well be true, but my point is more that Facebook/Meta/Zuckerberg seem almost uniquely unable to turn the startups into great new businesses, when compared with the other big tech companies.

Amazon added cloud and prime, Microsoft added cloud, xbox, 365, Google added Chrome, Android, cloud, Youtube, consumer subscriptions, workspace, etc. Netflix added streaming and their own content, Apple added mobile, wearables, subscriptions.

Meta though, they've got an abandoned phone platform from years ago, a half-baked Metaverse that is being defunded, a small hardware business for the Quest, a pro VR headset that got defunded, a crypto business that got deprioritised, and an LLM that's expensive relative to open competitors and underperforms relative to closed competitors... which the tide appears to be turning on as the AI bubble reaches popping point.

[dig1]

> Facebook/Meta/Zuckerberg seem almost uniquely unable to turn the startups into great new businesses, when compared with the other big tech companies.

Really? Instagram, WhatsApp... the two most used apps & services in the world?

> Google added Chrome, Android, cloud, Youtube,

It's arguable how GCP is profitable, but chrome/android/yt are money-losing businesses if you exclude ad revenues.