That was a great post. It's a very valid point that there are things going on in the world which are just as important as - if not for more important than - M&A around Internet media hubs. Seeing even one media site take a refreshingly honest stance like this warms the heart.
This many years after the 'net bubble burst, you'd think we would have gotten beyond this obsession with net media sites. But sadly, no... this reminds me of a year or two ago, when there was a similar situation involving, aaaah, I don't remember, maybe Facebook or something, and around the same time there was a huge enterprise software deal (IBM bought somebody, or something). Net result: The Facebook (or whoever it was) deal was reported everywhere, all over HN, Reddit, etc. The other deal? Crickets...
Whether all of us want to admit it or not, we do participate in something of an echo chamber here, and anything that comes along now and then and helps tear down those walls, even to a small degree, is a Good Thing.
IOW, there's a much bigger world out there than the world of YC, Twilio, Tumblr, Google, Yahoo, Dropbox, AirBnB, Medium, Apple, 37 Signals, Heroku, Square, Twitter, Facebook, Color, etc.
The simple fact of the matter is that the (consumer-facing) tech industry is much more sexy than pharma, by virtue of people consciously interacting with tech products on a daily basis. Every Tom, Dick, and Harry these days wants to make a mobile or web app, and it's getting easier for them to do so with each passing year.
In comparison, biotech doesn't have this phenomenon, which makes it a good industry to get into if you know what you're doing.
"Sexy", maybe. Depending on how you define that, and on your perspective. But more important in the general sense? I think you'd have a harder time supporting that argument if you tried to make it.
And anyway, I don't think anybody is arguing for a "black and white" world where one or the other of these deals gets all of the media attention and the other goes completely ignored... it seems that the call is to acknowledge both and treat them both as potentially very important.
> But more important in the general sense? I think you'd have a harder time supporting that argument if you tried to make it.
I'm not suggesting it's more important - quite the opposite. Pharma is very important. It's just not as accessible or comprehensible to the general public. So if you're looking to start a company, on average, you'll find that the competition is scarcer in pharma than in tech. How often does a 17 year old singlehandledly found and sell a company for $30 million to big pharma?
The problem is the overwhelming majority of 17 year olds don't know enough to make useful pharma research. And other than research not much really scales well-enough to be worth 30 million.
Think of it this way computer research goes back around 100 years, medical research goes back well over 2,000 years. There is simply less low hanging fruit left.
PS: Consider this there is a large but finite number of reasonably stable chemicals with 10 atoms or less. All of them have been considered as to there medical impacts. (There toxicity if nothing else.)
> The problem is the overwhelming majority of 17 year olds don't know enough to make useful pharma research.
There's more to it than that. The reason why the overwhelming majority of 17 year olds don't know enough to make useful pharma research is because it's not so easy to learn those skills and gain that knowledge.
Any 17 year old can teach himself to code and get valuable, real-world programming experience (and an actual job, for that matter) with nothing more than a laptop and an internet connection - everything else is free. He can then start a company, all from his parents' home.
You cannot say the same about pharma. The capital investment needed is much higher, the regulations are much stricter, and blind trial-and-error isn't an option unless you want to put your own life at risk. To put it simply, you're quite literally in the (human) meatspace.
Actually, the ability to make drugs or biologicals is quickly dropping in complexity. Right now, one can design drugs and biologicals on one's workstation. There are production agencies that can make one's design real. The only reason this is not as accessible and known as 3D printing is that the design phase requires much more specialized knowledge. It's not unlike designing one's own circuit board and getting one of the shops to print it for you.
That is absolutely false. We cannot reliably design drugs computationally, and that doesn't even take into account the tremendously difficult problem of predicting efficacy and toxicity. Drug interactions are very complex, poorly understood, and while our ability to do predictive analysis has improved a lot, we are not even close to designing drugs computationally today. What we can do is minimize the amount of trial and error and direct fugure experiments.
> Actually, the ability to make drugs or biologicals is quickly dropping in complexity. Right now, one can design drugs and biologicals on one's workstation.
Uh, no you cannot. I have worked on these exact sorts of problems, and we are nowhere near being able to "design drugs and biologicals on one's workstation."
Dr. Alexander Shulgin managed to some pretty groundbreaking drug design in his small home laboratory.
Of course it was hardly rigorous, and his analysis of what he made was mostly subjective rather than scientific, but it seems kind of analogous to what a hacker does vs what an engineer does.
I'm not sure how this is related to the technical issue of not being to just "design" drugs on a computer and have them "printed out."
> in his small home laboratory.
You can certainly work out of a home laboratory, if you so desire. The location is not particularly relevant. But it will definitely cost you a lot more than a laptop and internet would. And even then, what Shulgin did was quite limited by his capital resources.
> it seems kind of analogous to what a hacker does vs what an engineer does.
Don't forget that he already had a PhD in biochemistry from UC Berkeley. If he had just tried to learn like a "hacker," he would have either bankrupted or killed himself (or killed someone else and ended up in jail).
And even then, he got raided by the DEA and fined $25000 (the regulation issue).
I think OP missed one important point. Tumblr acquisition is like a Cinderella story: young high-school drop-out builds a billion dollar company. It is so American Dream! That's something average person would rather hear instead of "one bigco is merging with another bigco". Actavis news are for CNBC, not for general population.
But here at HN we should be better informed about other businesses and technologies than just Cinderella stories. Yahoo Tumblr deal news were on HN front page probably in 5 separate stories.
businesses and technologies than just Cinderella stories.
Wishful thinking. I see far more political stories than enterprise M&A on here. In fact, I very rarely see M&A on here. For example, Workday's IPO should have been on the frontpage. Hint - It wasn't and you've probably never heard of Workday.
I found this CNN post very shallow and naive. The main factor that impacts how widely an acquisition is reported is not what the company does, but rather, the household name recognition of the acquiree.
The reason Tumblr is reported widely in the media is because most people have heard of Tumblr. The reason Actavis/Warner Chilcott was not, is because no one has ever heard of either. If it had been the acquisition of Boeing, Pfizer, or any other company outside of tech that has household name recognition, you would see similar media attention.
I'm actually on the fence about which merger is more important.
On the one hand, tumblr is a toy[0]. Warner Chilcott, founded in 1968, and having gone through mergers before, is Serious Business.
On the other hand, should we really be upset that toy makers are getting a lot of press? I honestly go back and forth on the issue. True, if I had to pick between the medical products of WC/Actavis vs the blogging platform of tumblr I would probably pick WC, because I think the net happiness for the world is probably better served via their drugs than easy blogging access.
But there is something delightful about an age in which cool toys get recognized, and I think that's important to remember.
Incidentally, does anyone know if mergers like these affect which drugs get offered by a company? I can see the tumblr acquisition having a larger effect on society than the WC/Actavis one if drug companies are less likely to stop producing a drug than tech companies are to shut down a product.
0. I know a lot of toys turn out to be remarkably useful and transformative. That's part of my point.
> Incidentally, does anyone know if mergers like these affect which drugs get offered by a company?
I think the FTC can (and does) block pharma mergers which severely reduce competition -- they will either block a merger or force spin-offs of certain divisions in an effort to prevent the acquiring company to corner a market on certain drug therapies (e.g., http://ftc.gov/opa/2009/10/pfizer.shtm)
Finally, I don't know which acquisition is more "important", but I think the primary reason that the Tumblr acquisition makes news is because it has the feeling of a "lottery win".
Everybody likes this story: 26-year old CEO, a handful of employees. Maybe they worked hard, but they also caught the wave at the right time. Bunch of young people get rich over the course of a few years. *edit: Many people like to believe that they could get lucky and have a similar payday.
That's much more appealing than: company works hard, grows slowly, makes drugs, has setbacks, expands, has more setbacks, gets bought. Middle-aged people then get laid-off so that the acquiring company can squeeze more $$ out of WC's drugs.
OTOH, if tumblr disappeared today, I don't see how that would change the society. Facebook or Reddit - maybe, though even there doubtful, but but I don't see tumblr among the pillars of the society.
1) I think the author completely misses the point of why tumblr is fascinating to us. But i don't think it matters whether we see tumblr as a cool toy (like an iPhone) or just a well-designed re-tread (like Facebook vs Friendster).
Basically, how many people are able to accomplish a valuation of a billion dollars with just a few years' work? And with almost zero revenue to show for it? A vanishingly small group of folks, who may loom large in the consciousness of the tech world but are such incredible statistical outliers that they become newsworthy.
of course, not to mention that karp accomplished this while he was so young. And people are naturally fascinated with "lottery ticket" type rewards - fantasy money earned from a few year's work.
the man-bites-dog aspect is precisely why we're interested - it isn't what you normally see.
2) we expect old guys to make large business deals - that's what old guys do. and to be honest, the motivations behind M&A generally have nothing to do with "what's good for the customer." it is generally empire building, or reducing competition in the market, improving price negotiation leverage versus major customers.
Since business journalists are afraid or too uninformed to call out these true motivations behind corporate M&A, the journalism becomes frighteningly boring. so there's a decent reason that business news is a backwater. and i'm sure the average writer at fortune is fairly annoyed by that. hence this article.
I feel like we're celebrating whoever can make the most money in the most ridiculous way rather than those who make the most useful thing for society. A lot of kids are growing up with this pathetic and twisted idea of success being... come up with "some stupid internet thing that everyone uses", get money from some rich guys, get advice from other successful guys, grow your stupid internet thing into a business using their money and the hard work of hundreds of employees, be worshiped and become famous. On top of that media and society concentrate worship, idolization, and ass-kissing towards 1 person. It doesn't matter if you came up with the iPad while working at Apple, Steve Jobs will be the one who will be known for it by nearly everyone. Did you redesign Facebook and make hundreds of millions of people rejoice at the new easier layout? No one will know your name, Mark Zuckerberg will be praised. Did you create FarmVille, FishVille, Mafia Wars, Cafe World? Their names will be connected to Mark Pincus, not yours. Not to say that these leaders were lazy, many people have been given hundreds of millions and have wasted it away without having anything to show for it, these founders took the money and trippled it. That takes work & intelligence but it's never done by one person. Yet the success all goes to one person.
It's so shallow and superficial & yet there's no one to blame. It's no one's fault. We can't help we celebrate such primitive things. Especially looking at The Kardashians and Paris Hilton. Usefulness need not apply to this contest. Worth seems to be measured in how many people you can get to follow you. 50 years from now all of will be old and we'll read about how some 9 year old made $75 billion dollars by creating a website were kids under 18 can gossip and rate how lame their parents are. You will sigh. You will laugh. And you'll remember it all started in our generation.
I believe it's the novelty of the fact that "some stupid internet thing that everyone uses" was purchased for 1.1 billion that makes it newsworthy. An extremely profitable medical company that very few people come into contact and that makes life saving medicines is purchased for a large amount of money and goes unnoticed and this is somehow surprising? It's the height of pretentiousness to expect that everyone be as interested in the things that you are interested in and to look down on them if they aren't.
> So we give readers what they want, even if we don't necessarily think it's what they should want. It may mean we're no longer elitist. Or, more likely, it means we're no longer living up to our responsibilities... Sorry.
There's a lot to unpack there, but maybe the most revealing thing is that the paragraph made it through CNN's editorial process.
It's really unfortunate and sometimes unnerving that we live in a time where most people are so caught up in the hype and bullshit of meaningless companies, actions, ideas and people that have no real importance and benefit to our daily lives.
It's even more unfortunate to see the actions of CEOs based on hype, big cash reserves and Silicon Valley VCs begging for an exit. I've been seeing it all day on Twitter: VCs ecstatic about Tumblr's "successful exit", they're done and can now go home and drink champagne.
But the problem is not with Tumblr being a blog full of porn and cat GIFs, running out of money, having 175 employees most of which do little, and making $15M vs. $100M projected revenue. The problem is with the state of the industry as a whole.
The problem is with a company like Yahoo! rushing to get a deal done for a company that would be worth $100M in 6-months when it runs out of money. It just doesn't make sense. But maybe it's not supposed to.
Warner Chilcott is obviously a company that tries to do good and create products to better humanity (for the most part), and I'm not saying that Tumblr is worthless - it isn't - but the madness behind the media, the Yahoo! board meeting on a Sunday to get a deal done before Captain Zuckerberg swoops in (I'm sure he's laughing and could care less) is maddening.
This isn't a rant, it's more of a "what the hell is going on with companies and innovation of substance?" I really enjoy Thiels quote of "we wanted flying cars instead we got 140 characters." It really embodies the state of the industry in one sentence. Every month a new chat application gets a $3M round, another photo sharing app gets all the hype, bang with friends is the "it" app - what happened to people actually trying to solve REAL problems? Problems that will enable us to continue as a society and not implode.
It should be the opposite; more people trying to push the envelope, less people trying to copy apps because of monetary reasons.
Great work is hard work.
It's a shame the easy way is the default for so many, but the beauty of technology (and biology, in this case) is that we can help thousands with one tool.
what happened to people actually trying to solve REAL problems?
What did you work on today?
(EDIT) Less snarky way of putting it: It's not fair to judge others' motivations -- or to say that Tumblr's employees do "nothing" -- especially if (at the very least) you're not tackling big, "real" problems yourself.
What did I work on? Well, to answer your question I've been working on solving major problems affecting our society, which include obesity, diabetes, unhealthy lifestyles, poor nutrition and high blood pressure. With that said, it wasn't a snarky comment - it was an analysis of the state of innovation and business in SV in general. I'm tackling big problems. And I wish more people would do the same. We have a lot of challenges to solve.
Probably not the right place (or thread) to elaborate in detail on a handful of complex health problems that my team and I are working on. But with regards to obesity, for example, we're looking at hardware and software applications to gather, analyze and make sense of quite a bit of physiological, social, and genomic data. It starts with the basics really, and most people simply have a hard time executing them: exercise, proper nutrition, healthy sleep, etc. So the goals are to make sense of a ton of data, using existing and new sensors, and use software to enable preventive medicine.
Obviously, there's a lot more to it than this, but medicine and technology are two really exciting areas people should be starting companies in. Pushing the envelope, asking questions and trying to solve problems. Nothing wrong with the occasional social app or service having a big exit or becoming a major player, but that gives people a lot of incentive (and false sense of hope) to try and make another IG or the 15th chat app. It's amazing what a dozen great coders, thinkers and innovators from "Photo App A" could do, if they were focusing on bigger problems. And it doesn't begin or end with healthcare, you have energy, hunger, disease, and a dozen other real issues. But I digress.
What's in for people who don't have diabetes or obesity? I don't but I read some tumblr.
Futuremore, if you could just develop a pill that makes you fix your weight instantaneously and forever, that would be great; but data gathering will only help people willing to help themself. And most of the world doesn't have such big problems with obesity anyway, while they still like cat pictures.
Dan Primack, the author of this article, has a daily (M-F) business newsletter called the Term Sheet which is highly worth subscribing to. It does a great job -- as this article does -- of getting outside of the traditional SV VC bubble, focusing on all sorts of coverage from B2B to industrial to even fashion.
Yes it is great. It has a voice, isn't too dry, and gets me slightly out of the usual tech bubble-like posts I read elsewhere. Plus he often posts reader comments, which are critical and dissenting views of his own posts.
Glencore and Xstrata are so incredibly far from the consumer mind that it's hard to explain.
Yet the impact of that merger? Ultimately, very large.
But it's difficult to make a story out of it. No photogenic women are making instant billionaires out of photogenic high school dropouts. The narrative is dull. Two companies, one which digs and one which deals, have decided zzzzZZzz
Tumblr's 2012 Revenue was only $13 million? How can they afford 175 employees, a building, infrastructure, etc on $13 million and ~$125 million in seed? I may just have an issue with frugality I suppose.
In case you haven't heard, having revenue is no longer cool. Having a huge user base on a service that isn't self sustaining is - and people will pay big bucks for those companies!
The reasons listed are pretty silly and jaded. The reason the Tumblr acquisition is bigger news is simple: it's a big player in a fast growing economic sector. As big as both Warner Chilcott and Actavis are, their industry is mature. The Warner Chilcott acquisition is unlikely to shake things up. Tumblr is one of the "not facebook" players in social that's gotten a lot of mind share. If and how they can turn that mind share into revenue is important to the sector (and the market).
You didn't refute anything in the article. You're saying you think the Tumblr acquisition gets more attention because it has a lot of mindshare (which is circular logic) and because internet content is a faster growing market than pharmaceuticals (which I have no way of knowing whether or not that's true, but its not as if Primack is arguing the opposite.)
Bah. How much coverage do we get for, say, some random has-been celebrity's drunken arrest versus wars that cost a lot more than $11B?
What the media chooses to cover (and what consumers choose to read, since we no longer have the limited-sources excuse) has pretty much nothing to do with the actual big-picture importance of the events.
People have lost touch with reality a LONG time ago.
They do not care about health (America is the fattest, unhealthiest country on the planet), they don't care about science & technology (Tumblr, IG, FB, reality TV, TMZ, etc. dominate the news/app/entertainment spectrum and bring little to no value), they care about GIFs, cats, Kim Kardashian and other brain dead agenda.
It's very unfortunate but that's the way it is. People could care less about Warner Chilcott. They care about stupidity.
Companies like IG, Tumblr, and others are smart because they seem to employ the "if you can't beat em, join 'em" logic.
Actually, "I could care less" is a transplanted idiom (from Yiddish), and is correct. It implies "... but that would be too much work." It is an Americanism, though, and is not generally understood outside of the lingering cultural influences of the "borscht belt".
English -- any natural language that's progressed beyond early creole, for that matter -- is not, and should not be treated like, a completely self-consistent system of formal logic. "Me" (or other "object" pronouns) in a compound subject is correct, as are double negatives, split infinitives (English doesn't actually have an infinitive, it has a form of phrase that occupies the function of one), and so forth. The prescriptivist dictates of Lowth, Murray and Cobbett are an artificial imposition on language that rejects them at every turn. It's time to use the real grammar of the language, rather than trying to structure English on some formal (and, it would seem, rarely spoken) version of Latin or Greek.
Actavis (until recently Watson pharmaceuticals) is a generic pharmaceuticals company.
I don't know whether this type of industry can be called mature, but it was the fastest growing sector of the economy in the US for this year, if I'm not mistaken. A quick google search yields e.g. http://www.smartplanet.com/blog/smart-takes/top-10-fastest-g...
On the question of whether it will shake things up, there sure is some turmoil. Watson/Actavis has been on buying spree for like 2 years now. Besides minor players here and there (e.g. Specifar in Greece), they acquired the Actavis group and now they acquired Warner Chilcott. They were (I think) 5th and in a relatively small period they ended up being the 3rd largest generic drug company worldwide.
Tumblr is a non issue in the size of the story other than the "high school dropout makes big". Yahoo and Mayer have been trending for awhile. There is probably not so little of "omg what in the hell are they thinking with that price" going on too.
I don't think they're totally in the wrong reporting on on tumblr. The purchase of Tumblr by Yahoo is far more relevant to the majority of readers than Warner Chilcott. We use and interact with Tumblr, know about it's features, and understand the history of the new owner. This isn't just a story about a big number.
Actavis is this third largest generic drug manufacturer in the world and Warner Chilcott is also up there, most notable for buying Procter & Gamble's prescription drug arm a few years back. They make everything from aspirin to Prozac and chances are you're taking a drug manufactured by one of these two companies and it's pretty likely that you know someone who is kept alive by their products.
Merges in pharma often come with increased manufacturing capabilities and more efficient sales. Done right this merger could save people tens if not hundreds of millions of dollars a year in drugs around the world and make them more accessible. You really think that has less impact than Tumblr?
The problem with your reasoning is that people already know that the pharma industry has a complex industrial structure, and that mergers happen from time to time. Furthermore, prices change constantly for a variety of reasons. None of this imply that this merger is particularly interesting as news.
By your logic, people should be constantly bombarded with "important" stuff like price indices for medical services, world food prices, aggregate steel production, measures of industry concentration in the wholesale corn market etc.
"By your logic, people should be constantly bombarded with "important" stuff like price indices for medical services, world food prices, aggregate steel production, measures of industry concentration in the wholesale corn market etc."
Never did I say anything about bombarding anyone or price indices. My logic is that media should give a more equal representation to major industry events like M&As, especially when two such events occur on the same day. I would not argue this if the acquired company was some Tubmlr sized biotech firm with a drug in trials, but this is a merger between two pharmaceutical manufacturers that outsize Tumblr in almost every statistic (users, revenue, employees, etc.) by 1-3 orders of magnitude.
Oh and most people know nothing about pharma, just like they know little about what goes on in the background of their favorite sites in Silicon Valley, especially with acquisitions where integration takes a while and the public gets bored and forgets the event even happened.
We use and interact with Tumblr, know about it's features, and understand the history of the new owner.
I am confident the totality of online readers of Tumblr articles interact with the pharmaceuticals made by these two companies more than they interact with Tumblr.
How so? Most people who use Tumblr daily are under 30. Do people under 30 interact with pharma daily in the US? Why? Anti-depression meds come to mind, but why when you have tumblr?
The purchase of Tumblr by Yahoo is far more relevant to the majority of readers than Warner Chilcott.
I agree that the Tumblr news at least seems more important to a lot of people, and I'll add that perception is not always reality. Just because we've all heard of Tumblr and maybe even use Tumblr, doesn't actually mean that Tumblr is particularly important.
But isn't medical topics even less relevant for me today?
I'm 28, so if everything goes right I have 20 to 30 years before I'll need any kind of life saving from medicine. And in 20-30 years the landscape might be very different, so for me medical topics are not of any importance at all.
Unless they let me to grow hair or teeth; or customise my body and mind.
WRONG. Medical topics are more relevant for you today than have ever been before. The best medicine is preventative medicine and if you start a proactive approach now, you'll live longer. Not by waiting until you get a disease and then trying to figure out how to cure it using the latest technology. You could have a genetic mutation in the next five minutes, the more you know, the better prepared and proactive you'll be.
Healthcare has never been more important than it is today for all walks of life.
I'm sorry, but that was one of the most mind-blowing comments I've read on HN.
But I really don't want to spend any time today on using medical devices (that's the acquired company does, right?)
The probability of me having a genetic mutation is low given no family history.
I don't see the point of being old for so long it takes half of your life. I want to live my life and then be done with it at the age of 70, perhaps? Unless they find a way to make youth longer. Not even middle age - youth.
Healthcare may be important (especially for our economy), but if you believe that the average 20-something needs to be popping pills as preventative medicine, then you have been completely brainwashed by big-pharma advertising.
Exactly. The fact that that "majority" of "readers" in the US care more about Tumblr means nothing, Tumblr is the farthest away from important when it comes to technology, innovation, and I'll even say communication. It's just another stupid SV deal that guaranteed early investors and VC in Tumblr a nice exit before the wheels fell off that company. Yahoo! has cash and they use it in whatever ways they want.
I'll agree with OP that Yahoo is more relevant to the masses, but we all know the masses are constantly up for Darwin Awards.
>It's easier for most of us to understand what Tumblr makes than what Warner Chilcott makes.
I would argue that statement since he says Tumblr is a "blogging platform" and "the latest/greatest means for teens to express themselves". Tumblr is more nuanced than that. It's also a social network and to relegate it to teens seems very out of touch.
To me, it's much easier understand what a pharmaceutical company makes (drugs, a physical product) than what Tumblr makes (blog/social network/place for online advertising/???).
One important detail to remember is that Facebook, Tumblr, Yahoo, Google, etc are not in the search/blogging/social media industry. That's all a smokescreen. People who follow the money and value chain see past the porn and cat GIFs and consider these companies to be in the advertising industry. The average EV/EBITDA ratio for the conventional advertising industry is 7.77 (src:
http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/... ), while Warner Chilcott's is 2.94 (src:
http://www.wikinvest.com/stock/Warner_Chilcott_(WCRX)/Data/E... ). This implies that the market (in general) gives a higher valuation multiplier for advertising companies than this healthcare company. Then again, Facebook's EV/EBITDA ratio is 49.8 (src: http://www.wikinvest.com/stock/Facebook/Data ), which makes one wonder: what makes these high-tech mobile advertising companies more valuable than TV/print ads?
Obvious answer, but targeting is much more effective for online companies, and success is much easier to measure. An online advertising company can give much better, more quantifiable ROI by targeting specific users more likely to convert: in Google's case, it's largely due to the desire to click inherent in search, whereas in Facebook's case it's through deep demographic information. They can also directly measure the effect an advertisement has, by measuring click throughs, etc. Compared to the much more nebulous effects of TV/print ads, this can be highly appealing.
Only in the spirit of media taking a shot at itself, which I think we can all respect, I think the paradigm of the article can be applied to any type of news story. For example, 14,612 people were murdered in the US in 2011, but how many of those stories were ever heard on national 24 hour news channels, such as CNN? Perhaps a handful through the course of the year which the media focuses in on and exploits to their own financial gain, and the majority of those stories involve attractive white women.
It is hard to beat up one anyone openly critiquing themselves, but this could have had much greater impact by examining media behavior vis-a-vis a controversial issue not unequal treatment of two otherwise non-controversial mergers.
Well, but then there is also IMS Health buying 360Vantage. Still software, but in life sciences.
There is a lot going on outside the HN bubble, but this is ok, some markets are simply more closed off to outsiders. Life sciences software is not particularly open, a lot of vertical players in there now and "verticalness" is increasing.
HNers will likely completely miss that boat, but again, this doesn't mean anything there are enough other things happening and bigger fish to fry.
It might be better for companies not to have such press about their mergers or at least I don't see how it is any advantage for the short term blip media coverage of these kind of events provide. And if you are a value investor, having less noise around the price of a share due to short term media coverage of big events might be an advantage as well.
From an investment standpoint the Tumblr acquisition was far more interesting, because it represents a much bigger gamble. Sure, the numbers are relatively small now. But Tumblr is one of those companies that could end up dominating its market segment withing just a couple years. Or (more likely) it could become irrelevant and quietly closed.
>So why are we media folk so obsessed with the acquisition of a low-revenue blogging platform and so dismissive of an $11 billion combined revenue drug-maker? Four basic reasons:
The fourth point is specifically about them chasing pageviews: "4. We largely cater to people who spend part of their day on the web, consuming content. Not surprisingly, those people tend to have a particular interest in things that involve the web and web content. It's a huge built-in audience, and we reporters know that our bread is ultimately buttered by pageviews."
Tumblr's a consumer-facing media property. That's why it gets more press. More people know about it and directly use their product. (Same with Yahoo!.)
It's a self-referential link, as stated in the article.
"And, to be clear, we here at Fortune are certainly part of the editorial imbalance. So far this site has already published three posts about Yahoo's (YHOO) purchase of Tumblr, and none about Actavis buying Warner Chilcott (save for this one)."
The drug merger is uninteresting since as two slowish-growing public companies, the value of each are known and after some straightforward cost-cutting it will be business as usual. Yawn.
The Tumblr merger is uninteresting, as two sluggish and unexciting tech companies merging usually results in one even bigger and more sluggish tech company. After some straightforward cost cutting it will be business as usual. Yawn.
Unable to downvote. This post is dumb. Tumblr is far from sluggish. Tumblr likely will really operate fairly independently. There won't be any cost-cutting..probably the opposite.
That's the old rule in investing that things which bring really handsome profits down the line are not this much in the public interest.
When I was telling people back in 2007 I'm buying gold and silver they thought I'm crazy. It was waaay to expensive at $600usd and $10 usd respectively.
Since then I just heard that gold and silver are "a bubble". Literally, like for past 6 years my family, my coworkers, the media, you name it - treat this investment type with the highest dose of suspicion. While their "investments" (a.k.a. house - a place to live not an investment really) - went bad.
It's funny how the markets work.
The genuine growth stocks/assets will be the ones that don't bring too much of the media attention and the ones that "climb wall of worry".
Gold mining cost is currenly above the price of gold. A bubble?
Tumblr P/E (price to earning ratio) is 1:100. And any investor worth his buck knows that anything above 1:15 (some say 1:10 in bad market conditions like we have nowadays) is too expensive.
And still everybody wants to buy it, media reports on it all the time, and overnight everybody and their uncle knows who Mr. David Karp is. That's how you spot a bubble. Or at least seriously overvalued asset. And assets are to be bought on cheap and sold expensive not the other way around.
Quote:
"Gold producers, ignored as global stocks rebounded in the past two years and investors turned to exchange-traded funds that track bullion, face closing mines or shutting themselves down after the metal’s worst slump in three decades this week made 15 percent of miners unprofitable."
I also read that the biggest gold mine in the world in South Africa (70% world production) is not profitable at these prices.
But you'd need to google for that information yourself.
Also, I'll add another point. The definition of bubble is that nobody knows that's a bubble. Everybody will think and tell you it's a genuine investment, actually the best investment going on at the moment. That's why one way of making sure you're not investing in overvalued assets is to ask your cab driver if he invests (or would like to invest) in that asset. Now, evey cab driver who drives me stays away from gold because it's a "bubble". But in the day they would all just love to buy Facebook.
So media says gold is in bubble. All my friends do. My family does. You check the stats - the price merely covers or doesn't cover mining cost - that's your "wall of worry" factor - now you buy.
Don't get me wrong gold will be a bubble. But that's in distant future. That's when I'll be selling. (if im right)
Thanks. Very useful stuff, the site looks good too. I have all my savings in a bank account because I have no idea what to do with them. One day I would like to invest part of it, but you know, you need to understand a bit what you are doing there.
Actually, investing can be absolutely fascinating stuff and learning can eat plenty of your time. There are many schools of economics and different people will tell you different things, sometimes on opposite sides of an argument, all can be very interesting.
Try finding some videos of Peter Schiff, Marc Faber, Jim Rogers, Kyle Bass on youtube. Or read them. They are all in favor of gold, hard assets. Now, there are plenty of others strongly disagreeing with them who are very interesting to listen as well.
This many years after the 'net bubble burst, you'd think we would have gotten beyond this obsession with net media sites. But sadly, no... this reminds me of a year or two ago, when there was a similar situation involving, aaaah, I don't remember, maybe Facebook or something, and around the same time there was a huge enterprise software deal (IBM bought somebody, or something). Net result: The Facebook (or whoever it was) deal was reported everywhere, all over HN, Reddit, etc. The other deal? Crickets...
Whether all of us want to admit it or not, we do participate in something of an echo chamber here, and anything that comes along now and then and helps tear down those walls, even to a small degree, is a Good Thing.
IOW, there's a much bigger world out there than the world of YC, Twilio, Tumblr, Google, Yahoo, Dropbox, AirBnB, Medium, Apple, 37 Signals, Heroku, Square, Twitter, Facebook, Color, etc.