P&G Cuts More Than $100M in 'Largely Ineffective' Digital Ads - <AUTHOR> https://www.wsj.com/articles/p-g-cuts-more-than-100-million-in-largely-ineffective-digital-ads-1501191104 <comment><USER3> This reminds me of my experience with Google Adwords. My target was to increase signups for travellers to selected cities looking for 'events nearby'. So, I selected my cities and customer segments and had a limit set of 30 Dollars / day. Regularly, I paid for 2-5 Dollar more per day than my max price. I reduced the price to actually match my max price, but this would as a result out-price me of the relevant keywords. In addition, it never brought the clicks they charged me for. Yes, I was tracking the other side of it as well. I believe there is a whole world of click-fraud with Google and Facebook in this which noone is tracking. I am looking forward to a world where Silicon Valley is tackling the 'hard' problems of this world again (Space/ Marine Exploration, Artificial Intelligence, Big Data Analytics, etc) rather then the optimization of click bait.

<comment><USER4> Perhaps rather anecdotal, but this is why I joined Uber, and did not take my Facebook or Google offers. It feels nice to work on tech that directly impacts lives and how a persons day flows. As opposed to, as you correctly put it, optimizing click bait.

<comment><USER5> If Google or Facebook were gone tomorrow, I'd definitely notice. If Uber was gone tomorrow, I'd use Lyft.

<comment><USER6> You could use bing. Its about 90% as good.

<comment><USER7> DuckDuckGo has been fantastic lately, and the bang system keeps me from using anyone else.

</comment></comment></comment></comment></comment><comment><USER8> In my own personal experience, I can honestly say I've never "intentionally" clicked on an ad in the past 20+ years I've been on the internet. I will say I've certainly looked at ads in magazines, billboards, tv commercials (before tivo) and even those small planes pulling banners at the beach.

I am not surprised that digital marketing is not that effective. What does surprise me is why its taken this long to figure that out.

<comment><USER9> I almost feel like there are two factions. I'm pretty similar to you. I have clicked on ads a handful of times, but it's very rare. However, I have worked in jobs where I had visibility into the metrics, and I have seen internet ads be EXTREMELY effective. Not in terms of clicks (which could easily be accidental or fraudulent), but in terms of people clicking and then purchasing. People aren't going to "accidentally" click and then give us money. And I've seen many campaigns where we were getting huge ROI in terms of actual dollars. So there are clearly lots of people out there who do click on ads and take action. I think the problem comes when you're using an intermediate metric like clicks or impressions to measure success. You have to measure the actual outcome you are trying to drive, like purchases or subscriptions. Of course, with CPG, that's a lot harder to do. And I'm not convinced that pure brand advertising is any easier to measure online than it is offline.

<comment><USER10> Not only are there definitely people who click ads, but there are people _like us_ who click ads.

All the dev tool companies run ads! CircleCI runs them, but the dozen or so other dev tool companies where I know the founders or early hires also run ads. You would think given comments like this on HN that they would be useless, but we all run the numbers. The numbers say that not only are they effective, but that usually we should run more of them.

It's like when people here say "oh I hate talking to salespeople". Yet, salespeople make the world go around.

<comment><USER11> Or, they just don't have the slightest clue...

"Everyone is doing it, must be good."

I believe this summarizes the ad industry quite well: [https://www.youtube.com/watch?v=TysKyHXXtYQ](https://www.youtube.com/watch?v=TysKyHXXtYQ)

<comment><USER10> Did you not read my comment? If you did read my comment, why would you write this one?

<comment><USER11> Thought it was pretty clear that I didn't buy into yours.

I guess you could rephrase your comment as this: People who run ads believe ads works.

As an outsider that is not very convincing.

<comment><USER12> _People who run ads believe ads works._

Even then, I think you are being too generous. The stricter criterion is something like: "People who run more ads believe they will personally benefit from running more ads."

Ideally (and occasionally) this means that ad buyer believes the company as a whole will benefit from the advertising. But even if this belief is real, if the influence or income of the decision maker correlates positively with increasing spending on ads (and decreases with cutbacks) it can be difficult to distinguish belief from reality.

<comment><USER13> All this talk about "belief" like it's religion or something. It's reasonably feasible to get hard, scientific numbers that prove the effectiveness of advertising spend. Ie tracing click throughs vs conversion rate.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER14> I formerly worked as a digital influencer across the usual list of content platforms.

One of my last influencer marketing gigs was for a major multinational company. You've heard of them and they are not amateurs when it comes to marketing.

I asked one of their top marketing people how they measure the impact of digital influencer campaigns like ours. The short answer is that they don't. They have no idea how to.

When trying to measure the impact of marketing upon sales, teasing the signal out of the noise is almost impossible to do with confidence, especially for huge companies running many campaigns at any given time. I suspect this is true for all advertising, not just influencer marketing.

With few truly reliable metrics, marketers fall back on conventional wisdom. For a long time, conventional wisdom has been that you have to pour a ton of your marketing budget into digital or you're being left behind.

A change in that conventional wisdom seems to be afoot. I saw it as a digital content creator - ad revenues per view have been declining for a while now. Aside from the short-term panic over ads appearing next to extremist content, there might be something more long-term that's changing in corporate marketing strategy.

It's hard to see how this, and not a challenge from a new startup, is not the greatest threat to the success of Google and Facebook. Their business is digital advertising. If spending in that field declines, it's probably rough times ahead for those giants.

<comment><USER15> Do you mean digital influencer in the sense of social influencer? The latter can be measured quite well, depending on the method.

Using affiliate-like CPC click-through links on their social media accounts allows the ad network to observe exactly what is working. The problem is that social influencer status probably only really works for stars with a huge following of real life fans. One example (@work) was a celebrity posting about a nice pair of shoes. Those sold out within minutes, and the shoe company's store page crashed due to the unexpected demand. So it can work, but like most things in marketing, if everyone does it, it won't work for most.

<comment><USER16> I think you're overestimating how well social influencers can be measured. It's true, you can measure clicks to a landing page, one per influencer - <USER2> that's relatively annoying administratively, and only measures clicks, not sales. Plus, that counts on your influencer actually following instructions and using the custom landing page URL, which is harder than you might think.

If you're a consumer lifestyle or luxury brand, most of your sales are in- store and hence attribution due to influencers becomes incredibly difficult.

What many companies I've seen do is attempt to measure organic reach through a variety of internal or external scoring mechanisms, and using engagement as a proxy for reach. So a beauty influencer posting a screenshot of her travel bag with your brand tagged would have comments, likes, reshares/regrams measured, and then have that scored as some sort of an effectiveness index.

<comment><USER17> Its can be pretty straightforward if you run your campaigns through a software platform. The way we (mavrck.co) do it is we do outreach for a campaign, screen the influencers based on their engagement rates/relevancy, have influencers connect their instagram/facebook accounts to our platform, generate individual tracking links for each influencer, ingest their posts via API, and measure the comments/likes/clicks/conversions with our analytics.

<comment><USER16> Wouldn't that qualify as operating an ad network on instagram, something that is explicitly forbidden via the instagram terms of service?

"Don't transfer any data that you receive from us (including anonymous, aggregate, or derived data) to any ad network, data broker, influencer network, or other advertising or monetization-related service."

</comment></comment></comment></comment></comment><comment><USER18> Bob Hoffman at the Ad Contrarian called this in January:

"P&G To Online Ad World: We've Had Enough" \- [https://adcontrarian.blogspot.com/2017/01/p-to-online-ad- wor...](https://adcontrarian.blogspot.com/2017/01/p-to-online-ad-world-weve- had-enough.html)

Digital advertising is rife with (what should be considered) fraud. Advertisers feel as though they are getting fleeced, and the advertising middlemen reap massive margins. The accountability isn't where it needs to be; there are websites that hide ads under other ads, still reporting displays for all ads per page load. I suspect moves like this one will help the ecosystem change for the better.

<comment><USER19> Yeah, but it's not like traditional advertising is free of fraud either. You can't even really pretend to measure the effectiveness of campaigns there. And there's much more money in it.

<comment><USER20> > You can't even really pretend to measure the effectiveness of campaigns > there.

I disagree - for something at the scale of P&G, you can bet that they're doing a LOT of measuring for every campaign they run.

The article reads to me as if they're applying the same metrics to their online ads that they use already for traditional campaigns, and finding little impact.

<comment><USER21> Agree that they are measuring, but determining the cause and effect of each campaign is very hard. Sometimes ads have a clear impact, but those are cases that no one argues with. Mostly advertisers simply say (in effect) we got your message out, and there was an impact. If the low/high uptake was due to the ad or to the quality of the product or to the weakness of competitors - well no one can say.

<comment><USER22> >well no one can say. //

P&G must have the most and best data on the planet. By now they can probably say with a pretty high confidence interval.

<comment><USER23> That's not a real argument though.

Just assuming that they have a magical way to solve attribution for traditional ads because they're a bit corporation. If they did have that, they could just use the same tools on digital and report fake clicks and bots to Facebook and Google to get reimbursed. (Google at least refunds all impressions and clicks that were later detected as being fraudulent)

<comment><USER22> The sort of data they have would macro-, that's not telling you if any particular click is fake.

<comment><USER24> Correct. We're likely talking econometric/MMM modeling which likely tells them at the channel level what is or is not working, but they may not have enough data for that at the campaign level or lower.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER25> I've worked in and around marketing/advertising for the last 6 years in different capacities and have found that the emphasis on audience hyper- segmentation and retargeting to the exclusion of other methods is the single biggest piece of bullshit out there. Targeting people based on what they are apparently interested in vs. places they go that reflect those interests doesn't give better results and can turn off your customers. It sounds cool to marketing teams and it works to get you contest entries, but it doesn't usually translate to more conversions than a well managed campaign would give.

If I buy a mattress, advertising more mattresses to me doesn't make me more likely to buy them; I bought the thing already. Advertising mattresses to a person on a mattress review website, though - that works. Of course, that's harder to do.

<comment><USER26> Still getting TONS of car advertising, after I bought one 8 months ago (when I see it).

seriously car ads are what pushed me to JavaScript off by default since their ads are almost as rude as porn ads. Even the normal advertising reset trick of "open all in new tab" on a folder with a dozen cloud/server hosts didn't swap out advertising to their normally sane ads.

<comment><USER27> Can you elaborate on the reset trick? It's new to me.

<comment><USER26> Cloud providers, web hosts, and similar all provide pretty acceptable ads on average (soundless, videoless), while also tending to be a high bidder.

So sometimes I would use the open all option on a bookmark folder that I shoved a bunch of providers in. Just to have those ads show

</comment></comment></comment></comment><comment><USER28> As an ad exec once said, "half the money we spend on advertising is wasted. The trouble is, we don't know which half."

<comment><USER29> Well, I just found out which half I wasted on Google AdWords. I had a campaign targeting the US. It was much less effective than I had expected, and just yesterday I found out why: There is a little option in advanced settings that lets you decide if you want to display your ads to users "in your targeted countries", or "interested in your targeted countries". The second is the default option, and if you do not change it, it will display your ads in Belarus, India, Turkey and wherever, altough you have an US-only audience. I got lots of calls from the Adwords sales team, always trying to tell me how to spend more money on Adwords. Nobody every pointed at the wrong setting, although they had all my settings and campaigns clear in front of them. I have the feeling that Google owes me a few thousand dollars.

<comment><USER30> Plenty of reporting available that would have identified keywords and geo performance stats. Adwords seems easy enough but it's pretty complex to get things done right.

</comment></comment></comment><comment><USER31> This isn't really a qualitative judgement against advertising so much as what happens in large mature industries as waste and inefficiency and perverse incentives pile up. Look at any government/military over-spending for similar effects.

P&G is one of the largest advertisers on the planet using hundreds of agencies with thousands of vendors with millions of placements across digital media, managed by thousands of people trying to make themselves look good and get that bonus. This is a typical cycle of cleaning house.

The industry itself _is_ slowly getting better and will eventually fix many problems through technology and regulation but there's still a very long way to go for that.

</comment><comment><USER32> A couple of things going on at once - it's hard for old guard companies to compete in digital marketing because consumers are being trained to buy based on reviews, price, and delivery times more than brand. And when you're spending $100M/quarter over a dozen brands all digital marketing is going to be brand marketing.

It also raises a question about conversion being a lagging indicator here. It's possible after a few more months of lower spend they will start to see consumers pulling back.

<comment><USER33> Perhaps it's possible that digital marketing is not all that effective for commodity items?

I admit to having brand preferences for laundry detergent and garbage bags, though I like to believe (perhaps wishfully) they are a result of first-hand and family experiences.

<comment><USER34> My algorithm for that kind of stuff is what is cheapest in the store I am in? I think that is what a lot of people do.

<comment><USER35> Often it's a false economy. Dish detergent for example... the more expensive stuff is often far thicker concentrate and lasts many times longer than the cheap stuff.

<comment><USER36> I assumed they meant the cheapest among similar products, e.g. choose the standard brand on the BOGOF offer this week.

</comment></comment></comment></comment></comment><comment><USER37> Honestly, I'm waiting for the internet advertising apocalypse wherein retailers cut digital ad spending because ROI is too low - and only advertise on Facebook or other sites with super targeting.

That would effectively kill a good chunk of internet services.

[1] [https://marketinginsidergroup.com/content- marketing/marketer...](https://marketinginsidergroup.com/content- marketing/marketers-frustrated-with-digital-advertising-roi/)

<comment><USER38> I would be very happy to see that happen. I miss the old, useful, social internet.

</comment></comment><comment><USER39> I have to admit that at a deeper lever I'd love if advertisers get the fuck off of the web. I don't have a problem with advertising per se but the way it's used today hurts the medium in so many ways. Sites are bloated with ads, journalism is riffled with native advertising articles, malware is mainly spread through infected ads and on top of that we have a legion of companies out there which are collecting every kind of personal information imaginable without permission or any kind of regulation. Enough is enough.

<comment><USER40> The trouble is: given how much of the web relies on advertising, how would things fare once ads are gone?

<comment><USER41> When i use Google news , there's so much waste in web journalism: a million journalists rewriting the same article, and often a useless and low quality article, at that.

So maybe there's a better way.

<comment><USER42> _So maybe there 's a better way._

There's a reason those articles are so bad [https://www.theregister.co.uk/2017/07/06/robo_journalism_goo...](https://www.theregister.co.uk/2017/07/06/robo_journalism_google/)

<comment><USER41> This isn't the reason(although it could add to it). This is for local news, not the stuff we are talking about.

</comment></comment></comment></comment></comment><comment><USER43> Hopefully a step in the direction towards cleaning the internet from the blotch of online ads. Make the internet a place to learn again and an open platform where people and businesses can exchange ideas(and data), not the silo'ed short-term profit-mongering mess it has become.

<comment><USER44> I agree that would be amazing. Sadly, for every big advertiser that cuts back, a million others are willing to fill the void with a slightly smaller bid in order to gain exposure and eyeballs on their product. And publishers will sell it to them to keep the lights on. And yet, prices go up year after year on increased competition. Google's profit was up 29% last quarter on stronger ad sales, and Facebook was up 71% over last year. A race to the top, or the bottom?

</comment></comment><comment><USER45> Not sure what we can get from this article as there are so many variables... What "digital" spend was cut: paid search? online video? paid social media? brand vs. product oriented?

What was the impact of non-marketing drivers like distribution, price, promo, competition, and the economy?

What was the impact of (new) ad creative?

Maybe take it as they are under pressure to cut expenses and cutting marketing, digital and likely non-digital, certainly helps.

<comment><USER46> I don't think it really matters. The reality is that the Ad space is ridden with fraud, poorly performing networks, platforms and methods and I believe we will see an increase of companies dropping spending in digital advertising or at least consolidate around what works and internalize their ad buying (which has been done by ad buyers who literally rip customers off in the fees they take compared to the value they deliver)

</comment></comment><comment><USER47> Some of the responsibility for the failure of this should fall on the marketing managers and their lack of knowledge on what decent online advertising looks like.

I worked in AdLand for a while and remember the agencies impressing clients with bullshit results and pure vanity metrics.

Nothing about actual business results, just another thing marketing managers were seen to need to do.

<comment> jon-wood When I worked for an ad agency I was specifically told not to add event level tracking to campaign sites because we knew engagement was awful. We could easily give the client some great vanity metrics on things like number of visits but the moment you dug into conversion rates it all went to shit.

</comment></comment><comment><USER48> Online works better for PR, "astroturfing", manipulation of fundamental attitudes and opinions than for explicit ads.

Buy some reddit, facebook and twitter accounts, and with the right consultants, you will move the world.

<comment><USER49> For example, instead of spending millions on ads, write a story about "how you're not going to spend millions on ads" and get noticed by a lot of wealthy consumer in the prime pages of their Business Review newspapers.

</comment></comment><comment> joh-nan-drew Marketing is the price you pay to get attention. All marketing is a hack for attention. Being data-driven and figuring out the 1% of your digital ads that are working, then capitalizing on them, is a hack. Using a unique marketing distribution channel or method is a hack. Embedding the marketing into your product is a hack. These are all "growth" hacks.

Cutting in front of the line is a hack to get your lunch faster, but if everyone's doing it, the hack starts to lose effectiveness.

Not that digital ads today are ineffective, but I do think its methods have reached notable saturation points.

<comment><USER50> I think you're painting with too broad strokes by likening all marketing to hacks. Marketing is more like finding alpha in a changing, inefficient market. There are going to be short term and long term strategies that work. The only guarantee is that things will change with time and those with more information will beat those with less.

<comment> joh-nan-drew That sounds right. I look upon the word "hacking" favorably and use it broadly to mean something like "manipulating a system for a particular outcome" rather than just This One Simple Trick, sorry if I wasn't clearer.

I like the guarantee. That's why hacking in the conventional sense today-- which needs constant awareness, involvement, adaptation, experimentation to find out what works, non-codified intelligence, and dealing with the reality of a system -- can beat the process du jour. It might become the new canonical process if everyone else starts doing it.

Sometimes I feel like long-term or well-thought-out strategy is the hack in a sea of self-proclaimed hackers who focus on useless wins and optimizations.

</comment></comment></comment><comment><USER51> you can't track classic media ads roi that well for starters

they spend like 2 billion on ads, so all in this is a 5% cut

they sell all through distribution, so they probably can't match ads performance and growth that well in general

<comment><USER52> They spend $2.45B/yr, they cut $100M in one quarter. It's a 17% reduction assuming they continue to not spend that $100M/quarter.

</comment></comment><comment><USER53> >After cutting back on certain digital ads, "we didn't see a reduction in the growth rate,"

>P&G, whose brands include Bounty, Crest, Tide and Pampers, spent $2.45 billion on U.S. advertising, not including spending on some digital platforms

So, even if digital advertising performed on par with everything else, it would only affect the growth rate by 5% of the effect other advertising had. Surely other factors contribute to variability at least enough that an overall effect cannot be determined using this data?

</comment><comment><USER54> "after finding that ultra-niche targeting compromises reach and has limited effectiveness" "The bigger your brand, the more you need broad reach and less targeted media,"

This is quite interesting. I see that other companies are cutting down on agency spending as well and some are focused on having an internal agency. The idea is to know the consumer and have a quick response to what is trending. So, apparently, the information that Facebook provides is not enough to put together a small niche group of people and say that they all would like that product. Or, at least, not worth the dollar invested. But knowing who the target consumer is, and building targeted advertising at it, but reaching a larger population has a more efficient return. Even when it reaches people who are not in the target audience of your product. Because it is a more general campaign about something that is happening, it helps in building the brand. And big companies care a lot about their brands and what people think about them.

<comment><USER55> It's not about efficiency, it's about quantity. Let's say I profit $20 for each customer my ad engages. If I reach 1000 people with amazing targeting and get a 10% response rate, I'm making on average $2/person. If I broaden the reach to 100,000 people and get only a 1% response rate, I'm making on average $1/person.

Clearly, bringing in $1/person is less efficient than bringing in $2/person, but at the end of the day you have $100,000 instead of $2,000 (ignoring the cost of the ad for simplicity).

With the broad campaign, you still get the people you would have targeted with the narrow campaign. So if you're going to do the broad campaign, you're already done.

<comment><USER24> Don't forget to factor in agency costs and in house costs. People are expensive and hurt margins. At that scale it adds up since I'm sure many of their agency partners view them as a big brand advertising cash pinata

</comment></comment></comment><comment><USER56> I'm sorry to be that person, but if others start pulling their digital ads too, what effects with this have on the whole tech industry. Google and Facebook, who both are the face of the industry, would most likely get most of the blow. They both control over 77% of digital ad revenue [1]. Will that scenario only hurt those two and other ad providers in isolation or will investors reconsider tech company stocks as a whole?

[1] [http://fortune.com/2017/04/26/google-facebook-digital- ads/](http://fortune.com/2017/04/26/google-facebook-digital-ads/)

</comment><comment><USER57> Slightly relevant to the discussion, since P&G seems to have started make some changes to their digital marketing strategy earlier this year (It seems to have been a major change, since one of the companies actually had to shut down).

[https://adexchanger.com/advertiser/pg-parts-audience- science...](https://adexchanger.com/advertiser/pg-parts-audience-science-tees- neustar-dsp-posse/)

[https://adexchanger.com/platforms/audiencescience-shuts- door...](https://adexchanger.com/platforms/audiencescience-shuts-doors-less- month-pg-client-loss/)

</comment><comment><USER58> This is just one company. I worked for a big mobile games company, and their main complaint was how expensive where ads nowadays. They used to pump millions and get as many players as they wanted. Now you need to take a lot of care on how you spend your money, as the return of investment is not guaranteed if you pay too much.

If other companies follow suit, then we can talk about a more general issue. Maybe it is just that their campaigns were ineffective because were not good, or because their target users are not reached on digital ads.

</comment><comment><USER59> It's not clear whether this is old banner programmatic ads that were cut, or more sophisticated social data mined tracking. Assuming it was the former?

</comment><comment><USER60> You can ask: if this is not working for P&G why will this work for you. I have mixed experiences. If I am attacking a niche where the user will act immediately after finding you exist then it works, if you are targetting a big market with a lot of competitors it is not worth the money and time except you discover new specific keywords.

</comment><comment><USER61> I work on an engineering growth team that focuses on large-scale digital advertising and can say it does work, for the right business, in the right context. You need a proper analytics team, engineering team, and experience to do it right. Most people who buy online ads have no idea what they are doing.

</comment><comment><USER62> How many brands could just cut out the traditional or sales-based advertising and go for quality and word of mouth growth like ANKER?

Nothing sells me on a product like a happy customer. I scroll past the adds and related items on sites and dive right for the comments. Or just ask around work for what people use for X.

</comment><comment><USER63> It seems the issue is "overtargeting" of ads

P&G ads don't work like that. Their products appeal to a broad range of people, same as their ads. Specialized targeting literally does nothing to improve conversion (and keeping their product in mind)

<comment><USER64> They sell a broad range of products, but not all of them appeal to a broad range of people. They can surely improve conversion by marketing men's razors to men and women's razors to women, for example.

<comment><USER63> Yeah but still, men and women "targeting" is basic stuff

What online ads allow you to target is "men between 28-32 from eastern Europe who like Formula 1 and Classical Music"

</comment></comment></comment><comment><USER65> I think other companies might come to the same conclusion and also reduce their ad spending.

We're in an advertising bubble just like the dot com bubble except this time it's not stock prices that are frothy, it's the advertising revenue itself.

<comment><USER66> I said before that printing money using basic income would only inflate it. Ads are designed to increase consumption, and we have a debt-based economy.

</comment></comment><comment><USER67> Make ya wonder how many pre internet TV and print ads they would have sacked if they had the ability to truly measure their effectiveness.

Ya also have to wonder how they got to $100,000,000 worth of ads before they decided to pull back.

</comment><comment><USER68> Anyone that's ever taken a serious look at online advertising knows that the elephant in the room is that most of it doesn't work. P&G is just the latest large firm to call that out.

</comment><comment><USER69> Can anyone enlighten me on P&G cost cutting and board activity?

I've read they are "hurting" wondering if this is just cost cutting and not a deep analysis of ad/$ performance.

</comment><comment><USER70> It is very easy to waste big spends in online advertising. There are large swaths of revenue absorbing points that are completely useless or nearly useless.

There are also ways to do it effectively on limited spends. Just like anything else, it requires effort.

With as many channels as there are, and as many people who have found a way to avoid commercials, TV advertising is a shadow of what it used to be.

These days effective and valuable marketing, especially for large brands, is hard work. No one vendor is a complete solution, and you have to consistently experiment and determine what the best options are where your target customer eyeballs happen to be landing in an ever-changing landscape.

Advertising in general is ripe for disruption.

</comment><comment><USER71> People spend more time on devices than TVs so advertising will follow in the long term. In the short term it will take companies like this to force the ecosystem to keep clean.

</comment><comment><USER72> Does P&G have a substantial in house ad tech operation? They advertise so much that they could probably start their own DSP and license its services to others.

</comment><comment><USER73> Glad to see all of that advanced internet surveillance technology is being put to good use...

So much for the argument that tracking is helping companies serve you better ads.

</comment><comment><USER74> It seems like a lot until you consider that the total annual ad spend (just for Google alone) in in the tens of billions

</comment><comment><USER75> I've often dreamed of coding up some kind of worm-virus, but instead of stealing data or demanding ransom or corrupting storage, it would just install uBlock Origin on infected computers.

Millions of infected people, with zero idea what an "ad-blocker" is, just wondering where all the YouTube ads went. And then, hopefully after a month or so of infection, companies realizing that their bottom-lines were unaffected, pulling out of digital advertising altogether. Previously-thought-of-as- invincible giant behemoths like Facebook and Google, just crumbling to dust over a short span of time.

Just a dream though.

<comment><USER76> Personally I have grown so tired of analytics and advertising my personal idea would be to build a plugin that doesn't block anything. But instead it simply visits websites on random topics over time and clicks ads here and there. Slowly degrading the data shitty advertising companies have and ruining ROI. I am starting to do this manually and randomly clicking ads.

I honestly need to start doing that on facebook due to their new policy that every 2-3 posts need to be some "suggested" garbage

Honestly I am burned out by the constant barrage of terrible ads on most websites and social media in particular.

<comment><USER77> If I'm not mistaken this exists for Firefox. Or at least existed at some point, I guess something like that could get a lot of big players upset

<comment><USER78> Adnauseam?

[https://adnauseam.io/](https://adnauseam.io/)

</comment></comment></comment></comment><comment><USER79> Back in the olden days where ads where more sparse, they would have so much more impact. Nowadays after the awash of ads we have everywhere, companies are collectively loosing their ability to make ads impact. (by logic, the more we are exposed to it, the less effective it it).

Therefore they did it to themselves. They abused it, so that now people reject them where they can, and it becomes less profitable. No sympathy from me.

<comment><USER80> Ads worked differently back in the days. A hiking site would accept sponsorships by outdoor brands, basically copying the magazine model, where the targeted audience gets served targeted ads with publishers inserting themselves in the middle and collecting a fee.

The big brands have figured out that in cost-per-click (or any cost-per-action model) retargeting delivers the best results, so if you go and search for flights to Barcelona or some shoes, those flights and those shoes will follow you around - there's a high probability that a click will lead to a purchase, and it costs advertisers essentially zero if they're wrong, since you likely won't click.

The Web ads industry thus turned into a raffle industry - ads for same flights to Barcelona will turn up on outdoor enthusiast sites, CNN, Wired magazine, ESPN, your local newspaper site, Facebook and whatever else you happen to visit the next few days. In a raffle scenario the entity with the most raffle tickets gets higher chances of winning, so publishers are locked in a war to accummulate as many raffle tickets as possible with the hopes that one of them will be a major winner, i.e. you finally buying those tickets to Barcelona and those shoes on Zappos.

<comment><USER81> I see this as positive in some ways. Previously most topics made a pittance compared to the "mesothelioma attorney" kind of topics. So if your site wasn't about one of these high-paying keywords, tough luck. Retargeting levels the landscape a little.</comment></comment></comment>


How do you know you're not infected by Conficker? - <AUTHOR> http://blog.wildpackets.com/2009/09/how-do-you-know-youre-not-infected-by-conficker.html

<comment><USER2> I'm running Linux; that's how.</comment>


What are your thoughts on a cash-free society? - <AUTHOR> Especially when considering if the government charged negative interest rates, you'd have no way to escape. #NIRP #BOJ <comment><USER2> Basically that - a cashless society offers no means of protection against central banking, and is therefore to be avoided.

The last time the US Government did something similar, they confiscated gold, and for similar reasons.

<comment><USER3> I am not sure why this is down voted. I agree with the central tenant that putting faith in Central Banks is an INCREDIBLY BAD idea. One that we have been paying for in the U.S. for over 100 years.

</comment></comment><comment><USER4> Do you mean cash free as in no paper money and coins, or do you mean cash free like super slick trading algorithms in a stunning shared economy that really requires no form of money at all?</comment>


Kitesurf with CEOs and VCs in the west of Ireland - <AUTHOR> http://www.startappcompetition.com/maitai-ireland/ Would love to invite a few YC companies to Ireland to enjoy an invite only event in Achill Island, Mayo, Ireland. Looking for a mix of indivuals, CEOs, Founders and VCs. <comment><USER2> when?</comment>


My startup (Lines) will pitch to Richard Branson if you vote for us - <AUTHOR> http://www.virginmediapioneers.com/2014/04/vote-for-pitch-to-rich-2014-competition-finalists/

<comment><AUTHOR> Please help us get to the finals guys!

We really appreciate it :)

Sorry for the shameless self promotion</comment>


Preact, React alternative without weird Patents License - <AUTHOR> https://preactjs.com/ <comment><USER4> I'm a technology lawyer. I deal with a fairly high volume of open source licenses and I write a lot of software licenses. I'm also a former developer and still have hobby projects I write mostly in javascript - primarily in Node.

I've read the BSD+Patents licenses. What am I missing? It seems like it is designed to reduce the power of patent trolls and to reduce the power of people who use software written by facebook to sue facebook for patent infringement - which, IMHO - is pretty reasonable, especially given that I think it is an absurdity that software is ever granted patents in the first place (something being rectified, albeit slowly, in the post 'Alice' world).

So, what am I missing? Are there any other actual lawyers who can weigh in on this? Because I see a lot of FUD on here written by a lot of arm-chair lawyers and, when I go to read the licenses (which I do) I'm just not seeing it. I very much believe in evidence and I am always open to counter-arguments - <USER2> please, show me the problematic clauses or the problematic exercise of clauses by Facebook.

As of now, all I see is a license (probably written by Goodwin Proctor or Fenwick & West) with a restriction on initiating patent-based litigation - <USER3> can live with this. Again - I'm happy to stand corrected.

Disclaimer: I'm not your attorney, this is not legal advice, this is not an official legal opinion nor the opinion of my law firm.

<comment><USER5> See [http://www.rosenlaw.com/lj9.htm](http://www.rosenlaw.com/lj9.htm) particularly the strong patent retaliation clause portion.

<comment><USER4> So the concern is that if you are a company with a large patent portfolio, and you sue facebook for patent infringement unrelated to react, facebook will yank your react license?

<comment><USER6> I'm also a technology lawyer, i've written several of the patent grants used very widely, as well as having been responsible for open source licensing compliance at Google for a very long time .

If i thought this license would actually help i would support it in an instant. But so far

1\. i don't believe it would. It's a very old idea, discussed to death, with a lot of downside, and a little upside.

2\. they've ruined a lot of the possibility of getting people on board by doing it in a way that's fairly tone deaf.

As for the license itself:

You also have the same concern if you aren't large.

It's also not just going to yank your react license, it will yank your license to everything under this license.

This license will not have the effect of stopping patent litigation. Patent trolls don't use React, and most of the danger is still trolls.

If you really wanted to play _that_ game, you'd be better off saying "if you sue us, you lose the right to use facebook the service". That might have some effect (but probably not a lot).

Instead, this license will have the main effect of further enabling the large to leverage the small. Hey, seems like you got technology i like, and hey, looks like the app you depend on for your livelihood uses react. it'd be a shame if you had to sue us for taking your stuff and lose your react license.

Do i think facebook will do that? Honestly, no. I doubt it. They may by accident. Do i think, if widely adopted, it would have that effect: 100% yes.

As for the origins, these kinds of broad termination clauses have been around forever. They aren't anything new. As i've said before, they were considered and explicitly rejected from most current licenses with patent grants.

Rather than come to a community of license authors, etc, and say "hey, we want to re-explore this, because we're seeing a problem", they did it this way. That's ... unlikely to be a successful mechanism (and in fact, i know a large number of corporate counsel who have banned it).

<comment><USER4> You make a lot of good points, but I want to focus on just one.

> This license will not have the effect of stopping patent litigation. Patent > trolls don't use React, and most of the danger is still trolls.

I agree. However - implicit in your position (and my apologies if I am reading you wrong) is that there _are_ small players - or _any_ players - who have _valid_ software patents that _should_ be exercised against _anyone_ \- much less Facebook. As a general proposition, I'm hesitant to support that.

Let's put it another way - but first get some caveats out of the way: there may be things problematic with this license (your points are highly illustrative - especially about the systematic, higher-order effects). I also think that, as someone in private practice, I'm empathetic to Facebook's attorneys' goals here, and they are likely saving Facebook a whole host of headaches. I am also very well aware of the counterbalancing arguments regarding the duty of good stewardship of the open source community, and decisions like this by gigantic players such as Facebook have lasting effects for the entire community. /caveats

 _However_ \- defense of the right to pursue infringement litigation over software patents against _anyone_ is simply not a hill I am willing to die on. I am struck, as a result, by confusion at the willingness of open source lawyers to criticize facebook for license limitations aimed at limiting the rights of licensees to initiate patent suits - even if it is a self-serving limitation. My instinct is that, in general, push-back _against_ limitation (even imperfect ones) of the exercise of software patent rights, within the open source community, should be a fairly low priority. I'm happy to stand corrected - it happens often enough.

Let me make a crude analogy - _if_ you believe in certain forms of gun control, this would be the equivalent of a debate about what type of assault weapons may be owned by the public. If you are of the view that _no_ assault weapons (and I am using the term very, very broadly - I'm not interested in the highly technical debates of what constitutes an assault weapon for these purposes) should be owned by the general public, then law banning the ownership of a particular type of assault weapon against by a particular class of owner is not that big of a deal - even if it is crudely implemented. If anything, it may be a _step_ in the right direction. Accordingly, the criticisms of the BSD+Patent license by the open source community strikes me as analogous to criticism of a partial assault weapons ban by gun control advocates - it is a bit of a head-scratcher.

Back to this license, in more concrete terms - I am skeptical of the claim that there exists an entire class of small companies have that meaningful software patent portfolios that can be exercised against facebook, much less anyone, which companies will be disenfranchised of their rights by this license:

* First, software patents are severely diminished in the post-Alice world, as a category, and very likely to be invalidated in an enforcement action, especially against a company as wealthy and sophisticated as Facebook. Patent litigation with Facebook is going to be as scorched-earth as it can get - the arrow of the BSD+Patents license is but one in a quiver that is full of millions in cash and tens of thousands of associate hours.

* Second, if you have the wherewithal to enforce a patent, you have millions of dollars in attorneys fees at your disposal - meaning you are not _very_ small. Patent infringement litigation is called the sport of kings for a reason - it is monstrously expensive (I seem to recall statistics stating that a 'simple' patent claim is on the order of $1.5-3M to litigate to conclusion, per party).

* Third, if you have _non_ -software patents (e.g., medical devices, drugs, chemical compositions, manufacture processes, semi-conductors, etc.) - it strikes me that there is a low (maybe not zero, but low) chance that facebook's BSD+Patents license constitutes a substantial portion of your 'critical' software stack.

* And, finally, if after all this, you _are_ a small startup without a lot of money and you are trying to enforce software patents against Facebook (of all possible litigants, I can think of no larger juggernaut), and react (or any other BSD+Patents licensed software) is a part of your critical stack - there are _so_ many other existential questions about the company's strategy that the particular terms of this license are rather low on the list.

As I said, I am very happy to hear any feedback, and thanks for your thoughtful responses.

Edit / update:

A few notes, in no particular order:

Tl;dr - two main cases here: 1. one is trying to enforce software patents against facebook - I am not going to spend a lot of energy defending the exercise of software patents, generally; 2. one is trying to enforce non- software patents against facebook - I believe there is a low chance that Facebook's BSD+Patents software constitutes a meaningful part of your stack in this instance.

* You are likely viewing this issue from the point of view of someone who chooses what sorts of licenses Google should adopt. I _very_ much appreciate your insight and criticisms from that perspective. However, I am viewing it as counsel to a lot of small companies that have to be nimble - accordingly the scenario in question, where this license is a limitation of a startup's ability to succeed, involves that startup having been misguided into thinking that it is a good idea to sue Facebook for patent infringement over a software patent while also relying on Facebook software as a part of their critical stack. That is... quite a scenario. It reminds me of this scene from Dark Knight:

Lucius Fox: [in his office] Let me get this straight. You think that your client, one of the wealthiest, most powerful men in the world, is secretly a vigilante who spends his nights beating criminals to a pulp with his bare hands; and your plan, is to _blackmail_ this person?

[pause, Reese looks nervous]

Lucius Fox: Good luck.

<comment><USER6> "As a general proposition, I'm hesitant to support that."

I'm even fine with this (I hate software patents).

But it seems very wrong to essentially be able to take what you want from small companies because they are afraid to take you on.

Regardless of what mechanism you use to achieve it.

"and they are likely saving Facebook a whole host of headaches."

I am empathetic, but i also disbelieve this. I'm aware of every headache Google has ever had in these situations, and i can't imagine Facebook's are particularly different.

I can state affirmatively that this license would not have prevented even one of those headaches. Thus it would have been infinitely more helpful if they had cited _any_ examples.

As for your viewpoint on the scenario. FWIW: yes, i am certainly biased by what i've done. But I actually _have_ dealt with a tremendous number of startups, from both sides of the fence (I also do due diligence on this side, and have helped plenty on the other side). The number who would have no effective recourse under this license, who would have had effective recourse before, is quite high.

Would that recourse only come into play when they are essentially f _cked anyway? Yeah, maybe. But it 's worth _something*.

<comment><USER7> Hi Danny, thanks for your insight about this topic. As someone who works with licensing at Google can I get an idea of what would happen in this scenario.

Let's say Facebook has a Patent on something like `Components`, `Unidirectional data flow`, and `virtual DOM` which were core to React (of course, we don't know for sure). Now let's say a framework built at Google using the same ideas as `Components` and `Unidirectional data flow` under MIT. From what I can find about patents is that if you have a Patent on the eraser then that prevents anyone from building the pencil or at least the eraser can sue for patent infringement. Does this mean the framework that was built at Google under MIT can still be affected by Facebook? If that were the case can we assume Facebook wouldn't sue Google for the same reason as start-up wouldn't want to sue Facebook for patent infringement? What if a startup were sued Facebook for patent infringement and Facebook counter-sues for patent infringement because of use of `Components` and `Unidirectional data flow` in the MIT Google framework do you think Google would step in to help since the startup wouldn't have enough money to take on the counter-sue?

The idea here is that no one knows for sure what Facebook has for Patents on React yet the core concepts that were introduced to the community is wide spread.

Disclaimer: Of course, this is just hypothetical and you're not my lawyer and this is not an official legal opinion nor the opinion of Google.

</comment></comment></comment></comment></comment></comment></comment><comment><USER8> Preact, React alternative that almost certainly implements many of React's patents, but without a license to do so. Doesn't sound like a great alternative to me.

<comment><USER9> What patents regarding React exist and which of these are held by Facebook?

<comment><USER10> That's part of the strangeness of this whole debate: nobody knows. The list of Facebook's patents is public, but I'm not aware of anyone publicly going and doing the research to see which of them, if any, are likely to apply to React. (Possibly because of the whole treble damages thing - along with the fact that Facebook has thousands of patents to look through.) Facebook's lawyers may or may not have done that research, but it's in their best interest to keep things as vague as possible (at least up to the point where they actually threaten to sue someone), to avoid workarounds.

<comment><USER11> Facebook can sue anyone for patent infringement whether or not they use React. Many people seem to believe that they can't ever be sued by Facebook for any reason as long as they don't use React although that is not the case.

</comment></comment></comment></comment><comment><USER12> If anyone has experience switching from React to Preact I would be interested in hearing what that was like.

<comment><USER13> We've migrated several projects to Preact with no issues at all. The projects depend on numerous React-based modules, including an extensive collection of components, some with state management, routing, data fetching, etc. They work seamlessly, built on either React or Preact.

It only takes a small change in the build config, using babel-plugin-module- resolver to alias react and react-dom, to preact-compat.

</comment></comment><comment><USER14> How does Inferno ([https://infernojs.org/](https://infernojs.org/)) compare to Preact? Seems to be faster than both React and Preact.

<comment><USER15> I watched both a while ago, things could have changed.

Inferno was positioned back then as some kind of a ressearch thing not suited for production.

Preact pros was:

\- very small size (it's near 5kb Non-Gzipped without compatibility layer), perfect for lightweb mobile apps (Inferno was like 60kb, React 250kb)

\- has less gimmicks for porting from React and an optional compatibility layer to enable some of low-level React libs and components

Preact has no synthetic event system wrapping, if you heavily relly on it then things could be rough.</comment></comment>


Maintaining good health at a desk job - <AUTHOR> https://debugandrelease.blogspot.com/2018/12/how-to-maintain-good-health-as.html <comment><USER2> While there's an argument to make for blue light blocking with regards to sleep and maybe eye strain, the article is wrong about UV protection: modern (non-CRT) screens do not emit UV.

<comment><AUTHOR> I would read this article, it gives more explanation into UV light in screens (monitors): [https://www.asus.com/Microsite/display/eye_care_technology/](https://www.asus.com/Microsite/display/eye_care_technology/)

</comment></comment><comment><USER3> The second point "20-20-20" is not only about your eyes, but even your spine, when you sit for a long time you are damaging your spine, you can notice you have reached the limit when you are not sitting straight but you have your legs crossed or on a side, going for a 20 feet walk and then sitting again is enough to make you go back to the correct position.

For the last point "walk", I personally love to walk, I used to go to work by bike but then I changed to just walking, my workplace is around 3 miles from where I live, so every day I walk for around 90 minutes (going back and forth), I noticed this helped me a lot, less back pain, more energy and also lost several kilos.

If you are not lucky enough to work so close to your workplace or you don't want to walk so much, I recommend going out of the bus/metro a couple of stops earlier, and maybe increase the number of stops over time.

</comment><comment><USER4> Anecdote and warning to the younger devs out there:

I'm not sure about the UV light portion of this article, but I haven't noticed eye strain since I've repositioned my monitor, which this also brings up. For a couple of years I would notice that occasionally throughout "crunch times" at work I would wake up (and go to sleep) with near-nauseating aches in the back of my eyes. Eventually I identified it to looking _down toward_ my monitor/phone rather than _forward to_.

Also, I was extremely active until my mid-twenties; skateboarding, running, resistance training, etc. but over time the passion for what I did became my sole priority and I gained a bit of weight as a result. That, coupled with poor posture at my desk (slouching for days), laid bare some old lower back injuries that I didn't even know existed. After tolerating it for almost a year I got an MRI and confirmed my lumbar region was in a decent state of atrophy, which was leading to near-constant pain.

I had two options: maintain my current lifestyle or start moving around more and tighten up my lumbar region's musculature to quell the pain. I chose the latter, lost weight, started a morning routine again, and now I rarely feel pain.

TL;DR: Eventually your body will find something wrong with your desk job. Be proactive and give it what it needs before you're forced to.

<comment><AUTHOR> This is good advice, thank you!</comment></comment>


Journey from 0 to 5k per month for SAAS business with no outside funding - <AUTHOR> https://azuredeskblog.azurewebsites.net/0-to-5k-revenue-per-month-saas-business-with-no-outside-money/ <comment><AUTHOR> As David from 37signal says if you cannot make money with your own money how are you going to make money with someone else money

</comment><comment><AUTHOR> Why take outside money since its so easy to build products with Microsoft BizSpark.</comment>


What's Really Going on with Student Loan Debt Collection in Texas? - <AUTHOR> http://www.texasmonthly.com/the-daily-post/whats-really-going-on-with-student-loan-debt-collection-in-texas/#sthash.3Ctva1pL.dpuf <comment><USER2> This is updated content. Here is HN reaction to a couple of earlier stories that didn't give the details:

[https://news.ycombinator.com/item?id=11115055](https://news.ycombinator.com/item?id=11115055)

[https://news.ycombinator.com/item?id=11110473](https://news.ycombinator.com/item?id=11110473)</comment>


Google doesn't like my name - <AUTHOR> http://0pointer.de/blog/projects/google-doesnt-like-my-name.html#comments

<comment><USER2> I think the site went down? Here's the text from the cached version:

"Nice one, Google suspended my Google+ account because I created it under, well, my name, which is "Lennart Poettering", and Google+ thinks that wasn't my name, even though it says so in my passport, and almost every document I own and I was never aware I had any other name. This is ricidulous. Google, give me my name back! This is a really uncool move."

<comment><AUTHOR> seems back up now, just slow</comment></comment>


You have a comfort zone; even if you are a rebel, challenge it - <AUTHOR> http://www.liriandersson.com/?p=1396

<comment><USER2> Paraphrasing "The Rock Warrior's Way" (_the_ book on mental training for rock climbers, IMO) the comfort zone is where your Ego wants to keep you, because you won't fail and you won't let yourself down. The only way to improve yourself is through learning, which is done outside of the comfort zone. When you get scared or uncomfortable, your Ego works to push you back into that comfort zone. By countering that force, trying things you're not sure of, you learn. In the longer run, you expand your comfort zone, and become capable of more.

This of course doesn't mean ignore fear, but analyze the risks you will take, decide what are acceptable risks that still make you comfortable, and then wholly commit to a path of action outside of your familiar comfort zone.</comment>


McDonald's pulls out of Iceland - <AUTHOR> http://news.bbc.co.uk/2/hi/8327185.stm <comment><USER2> What is the relevance now, almost four years later?</comment>


Why I'm not buying Facebook - <AUTHOR> http://finance.fortune.cnn.com/2011/01/04/five-reasons-why-im-not-buying-facebook/ <comment><USER2> I remember how excited average investors were at the prospect of a new way of going public when Google announced its innovative auction IPO. "Finally, Wall Street banks wouldn't be able to crowd to the front of the line!" Their public auction, their "don't be evil", and their continued use of their power for good -- like their trick to get openness principles adopted during the wireless spectrum auction -- all exemplified a company thinking and acting like a good corporate citizen at all levels.

Contrast this to FB. They are actually cozying up to Wall Street rather than eschewing them. "Don't be evil" was replaced with a series of privacy gaffes, a flurry of lawsuits surrounding the company's founding, and a CEO who has called early users dumb fucks. It's sad to see how Google's pioneering isn't being emulated by the next big tech company.

<comment><USER3> The behavior and culture of a company is often a direct reflection of the character of the people who founded it. Unfortunately, very few 24 year olds are mature enough to handle the responsibility and decisions that come with a large corporation - even though the corporation may be successful, other problems become evident. Take Etsy, for instance, another company founded by a 24 year old. While they have been successful overall, the company culture is atrocious. It's not just youth that is the problem, of course.

<comment><USER4> Can you explain further about Etsy? Is this documented somewhere?

<comment><USER3> There is plenty of discontent documented on the web, in blogs, on Etsy's forums (which are difficult to penetrate, since the search and navigation features are poor), on the forums of other marketplace sites, on Twitter, and so on.

They have a knack for turning away people who should be their biggest supporters. I can think of many successful shop owners have left after 2-3 years, disappointed by the way the site is administrated.

<comment><USER5> Yeah this is my experience with Etsy as well. I have a poor opinion of the company from talking to sellers who are friends.

I wrote a scraper of their site for friends to get their sales data for taxes. Years went by before they bothered to implement this trivial feature. My code worked because in two years their pages didn't change at all. Sorta crazy.

They seem to be getting better but I don't know.

</comment></comment></comment></comment></comment><comment><USER6> _"And don't give me that crap about VCs being "early stage" and wanting to cash out of a "mature" investment. These people are as money hungry as any other institutional investor, and would let it ride unless….they saw something that suggested that the era of stupendous growth was over."_

The author doesn't seem to understand how the venture asset class works.

Venture funds are owned by their limited partners (LPs), and typically have a fixed, 10-year life. After 10 years, the fund liquidates and the LPs (hopefully) get a nice return on their investment.

It's been 6.5 years since Facebook's first venture investments. If the investment vehicle was already 2-3 years old at that time, then they _have_ to liquidate soon, even if the managing partners believe Facebook will continue to appreciate in value.

The author seems to think that anytime an investor wants to cash out, it's because they don't "believe" in the investment.

<comment><USER7> Many VC funds have 1-2 years they can tack on in addition to the 10-year life in cases where one or more of their investments have not exited.

That said, it's not the return multiple that matters for VCs, it's the IRR (i.e. time is a factor).

</comment></comment><comment><USER8> _The market value of Goldman Sachs is just $88 billion. I'd take more than half that company over the whole of Facebook any day of the week._

It's a fair point: if you had $50 billion lying around the place, which of the two would _you_ choose to invest in?

<comment><USER6> I remember when Goldman Sachs went public in 1999, only 12% of their shares went public. The remainder stayed with the partnership. I'm not sure (or able to quickly find) the current ownership, but it's certainly not _ALL_ publicly traded.

So $50 billion would get you about one-fourteenth of Goldman. Not half.

Edit: grossly mis-remembered my facts. 511M shares include both stockholders and the shares of the former partners.

<comment><USER9> If I had $50 billion on this day to buy part of 1 company, I'd take Goldman no question.

A few years ago if you got Facebook stock at a lower valuation, sure that would make you a lot of money. But if Facebook makes $2 billion now, and they already have 25% of the internet users as members, where does the growth come from? 50b valuation is right given their current revenues, but they're not going to go from 25% to 100% of total internet users. And their cost structure will not go down to 0. So we're basically betting on how much more money Facebook can squeeze out of each active user. I just don't see it being a huge amount.

Where as GS has a lot of ways to make money, and has proven their ability to make money over and over and over again through a lot of markets and a lot of times. Facebook could peak at $100b and you only doubled your money. (Which isn't that good for this kind of investment).

<comment><USER10> While I'm sure it's a factor, I'm not convinced that Facebook's growth needs involve having to increase their userbase in that manner. There are still many ways to monetize the existing one since I don't believe they've done that very efficiently yet.

<comment><USER11> I think you're missing the danger that a lack of growth involves to Facebook.

Facebook isn't monetizing their existing customers and their customers are there because "it's the thing" - all one billion of them or however many they currently have. We aren't just there because everyone else is, we're there 'cause it's like a new club, a new experience, _new_ thing. NEW. If everyone's on Facebook and it's just that dumb place that everyone on, then... the appeal shrinks...

If Facebook growth visibly stalled, if I'm no longer having that interesting experience of old acquaintances becoming newly visible, then suddenly the process of _Facebook shrinkage_ appears. And if this is the moment Facebook is visibly trying to get more out of me, then the shrinkage might really accelerates.

I've seen just a couple friends quit FB recently. Not a big trend but I also haven't seen more people join.

Imagine if ... it was ... the most ephemeral $50 B _ever_...

<comment><USER10> I think Facebook's way past being the 'new' thing. People are finding a use for it beyond 'old acquaintances becoming newly visible".

You have the average user who uses it to keep in touch with friends, but you also have a growing number of users who are using Facebook in more and more creative ways. I personally know a couple of hundred friends who have thousands of pictures hosted on it (not something they'd give up easily), I've seen my mother find all her elementary classmates and organize a reunion spanning several states all within 2 months (surprised even me, I didn't think she got past her yahoo email).

My point is, Facebook's utility for its users is still increasing, something that stagnated in Myspace' case. We haven't even touched on the social gaming aspect of it (If I see another cityville invite I swear I'll block them fools). Growth to me involves more creative ways to involve its existing users, as well as of course growing its numbers (which it is). There's still the potential of its international users (which I believe is larger than its US Mainland users), increased corporate/business identities on the site, social commerce (barely touched), organized product reviews, that new mail system it's supposedly rolling out, and so on. We can talk numbers, but potential for monetizing their existing userbase appeals to me more.

</comment></comment></comment></comment></comment></comment><comment><USER12> The only people what can make money on Facebook stock, is Chinese government officials. All they need to do, is to accumulate $FCBK stock and then allow Facebook.com to be used in China. Number of Facebook users will jump from 0.5B to 1.5B, same with the valuation from $50B to $150B ;)

<comment><USER13> They could do it twice. Buy before unblocking it and then short before blocking it again.

<comment><USER12> Then they should do many round-trips:

      1. Long $FCBK
      2. Unblock facebook.com
      3. Sell $FCBK
      4. Short $FCBK
      5. Block facebook.com
      6. Cover $FCBK
      7. go to #1

</comment></comment></comment><comment><USER14> "It's hard to see why, though: DST got in at a $10 billion valuation in May 2009. Facebook's user base has more than doubled since then. So its valuation should…quintuple?"

Good point, according to Metcalfe's Law [1], it should actually only have quadrupled.

[1] <http://en.wikipedia.org/wiki/Metcalfes_law>

</comment><comment><USER15> Facebook has... twice myspace's revenue.

Just let that sink in for a while.

<comment><USER16> Wait... is that good or bad?

<comment><USER15> It's troublesome if you want to invest in facebook. Facebook has 10x as many users as myspace, and they've translated that into a great deal of hype. But they've yet to translate it into sizable revenue, let alone into profit.

<comment><USER10> Wait, let me get this straight. $2B in revenue is not 'sizeable' ?

<comment><USER15> Myspace hasn't released revenue information for 2010 yet. It's likely that the ratio will change substantially in facebook's favor as their revenue has grown considerably (assuming facebook's revenue reporting is trustworthy).

Nevertheless, Facebook's valuation is still shockingly inflated. Compared to Apple they have 1/6th the valuation at 1/30th the revenue, 1/4th the valuation at 1/12th the revenue of Google. It seems likely that Facebook is overvalued by at least a factor of 3, perhaps more (since both Google and Apple are bound by stringent revenue reporting rules).

At 1/6th the valuation of Apple (which is widely considered to be a bit overvalued today as well) but with one 30th of the revenue (

<comment><USER17> "At 1/6th the valuation of Apple (which is widely considered to be a bit overvalued today as well)"

I had also assumed that Apple was trading at a premium, before reading this.

[http://www.appleinsider.com/articles/11/01/03/verizon_iphone...](http://www.appleinsider.com/articles/11/01/03/verizon_iphone_predicted_to_earn_apple_respect_on_wall_street.html)

"Reiner noted that Wall Street investors typically grant companies with 70 percent earnings per share growth a "premium valuation." But AAPL stock is valued at just 14 times its EPS, which is equivalent to the Standard & Poor's average."

The fact that Apple is only trading at the S&P average relative to EPS, and is still the second most highly valued company in the world, with 70 percent EPS growth, puts into perspective what an absurdly good job they're doing.

<comment><USER18> Keep in mind, they also actually make physical objects that exist in reality.

</comment></comment></comment></comment></comment></comment></comment><comment><USER19> One reason why I'm not buying Facebook:

I don't have $2mil lying around.

Another one;

Why is Mark so reticent to IPO? Because he loses control? Or because that means making the numbers public, and people will see just where the money is going. Either way, if the CEO doesn't want to go public and may be forced to, that is not good.

<comment><USER20> Bill Gates was another person who didn't want to do an IPO. He almost cancelled it a number of times during the process as he felt it would just be a distraction to actually getting real business done. Mark Zuckerberg could have similar concerns.

<comment><USER19> I didn't know that. It certainly sounds reasonable, but is that what happened at Microsoft, after their IPO?

</comment></comment></comment><comment><USER21> I do not have a FB account. You do not need FB to simply take benefit of the web at large. But you do need a good search engine.

For me, FB is the future Second Life. Making money now and hyped, but at the end, it will just be a simple good business, but not a stratospheric one.

<comment><USER22> I don't use FB either (although I do have an account).

However, my kids use it all the time and it's a vital part of their social life. I can sort of understand the valuation of FB - the people who use it regularly _really_ depend on it and in a way that is much stickier than things like Google search.

The only thing that I can see that might hurt FB is if it becomes too popular and there is a mass switch by the "cool" people to use some other service - given that it is based on socializing rather than hard features this could well happen. However, I don't see any risk of this at the moment.

</comment></comment><comment><USER23> "And any advertiser who is trying to target me on the social network is wasting their money."

He ruined a perfectly objective point with this subjective generalization.

That being said, I'm with him for on most points, and I agree on the bigger picture.

<comment><USER24> The future of Facebook is not targeting you on 'a social network', its opening up an ad-sense competitor and targeting you on any website - with your personal information. The like and connect buttons are just the first step.

With that in mind it sounds like a good deal to me.

<comment><USER25> I'm surprised how few people seem to see this opportunity. They should be able to grab a huge part of online advertising.

Also, I have a feeling that a lot of big media would like to stick it to Google, and would rather get their ads from Facebook instead.

<comment><USER24> Considering their TOS for the graph data - summary don't use the data to target ads, its just a matter of time before they launch this.

</comment></comment></comment></comment><comment><USER26> I was an early adopter of Facebook back in the day it was only open to a handful of school (VERY early 2004). It was nice and exciting and whatnot. But I've lost interest in it _completely_. I speculate that it's only newcomers that find it interesting. I now use FB only as a means of sending someone a quick note, getting invitations to events (a la evite -- remember that?), or maybe looking up a picture I was tagged in by a friend. If back in the day people put in their hobbies, activities, interests, and list of classes (yup, that was available. Great stalking tool...!), I find people's profiles completely empty. Anybody with a different experience? Do you ACTUALLY use FB, or are you only drawn to it because of the reasons I outlined above? Please note that I'm not hating on FB. They do what they do well. Just sharing my experience (and at this point, I will never ever be able to get a job at FB... ;-) ).

<comment><USER27> _Do you ACTUALLY use FB?_

Yes. It probably helps that my family, and my wife's family, are all several thousand miles away and we just had our first child. We spend a lot of time on both FB and Skype, keeping everyone up to date.

<comment><USER26> so why FB and not Twitter, for example? Is it the simplicity of having your photo album and messaging under the same platform?

<comment><USER27> Integration of photos, videos and messaging is definitely useful, as is the fact that all of our relatives have actually _heard_ of facebook as opposed to twitter ;)

I guess the other consideration is that facebook at least has some semblance of privacy, which is reassuring when posting photos and videos of someone too young to consent (or talk, for that matter).

<comment><USER28> Thank you for your remark in the second paragraph. I was beginning to think that I'm the only person on this planet concerned by all these "cute" baby pictures being posted publicly.

Pictures which the person on it will likely be really ashamed of in a few years.

Even though babies might look cute and you kinda might have "created" them, they are real people, not pets or lifeless objects.

The same as you can't post pictures of a random person without their consent, you really shouldn't post pictures of your child. Leave the posting of their baby pictures to them, once they are old enough.

</comment></comment></comment></comment></comment><comment><USER29> "The market value of Goldman Sachs is just $88 billion. I'd take more than half that company over the whole of Facebook any day of the week."

GS was founded in 1869; Facebook in 2004.

<comment><USER30> GS has sustained its business over 140 years, consistently making a _lot_ of money. (Also we recently found they are now, in effect, insured by the US government in a way FB can only dream of)

</comment></comment><comment><USER31> Reason #3 shows that the author does not understand even the basics of virtual goods and facebook platform monetization. The other points are nearly as non- sensical.

<comment><USER32> Please elaborate then, guy who works at Zynga.

<comment> brown9-2 I'll take a crack at it. Here the author seems to be claiming that to remain popular and grow, Zynga and other Facebook-platform-users will need to have razor thin profit margins like Walmart in order to reach as many people with the lowest-common-denominator:

 _But here's the disconnect: if Facebook's future success depends on aiming for the lowest common denominator with the most people possible, that implies pretty slim margins a la Wal-Mart. You think they're going to justify a $50 billion market capitalization through banner ads? Are you kidding me?_

How does selling virtual goods - which are all profit - relate at all to selling actual physical goods to consumers? Walmart drives the price down on what it sells based on it's huge presence in the market. This analogy barely makes any sense, and I have no idea what banner ads have to do with the comparison.

Frankly I would say that Reason #3 reveals that the author has a hard time making an argument in a concise or clear way.

<comment><USER33> He's clearly talking about the software and not the "virtual goods". Zynga's games require all the engineering expertise required from WalMart's 2.99 gallon jars of pickles. Any other company that can deliver pickles in an acceptable way can get right into that market. By contrast, try making a WoW or Call of Duty clone. Huge, huge undertakings.

If you don't believe me, actually play some of Zynga's games. 50 percent of the random shit on Kongregate is better by far. The difference is marketing only.

<comment><USER34> Eh. Zynga is social games at scale. The engineering talent isn't in the games part, it's in the scale part. Getting to that scale isn't any easy feat either.

What you've basically just said is that any idiot could clone facebook. Yes, they could. Except they still have everything to do.

<comment><USER35> World of Warcraft has 12 million subscribers.

Any idiot can clone Facebook, getting users to use Facebook was the hard part.

Scaling is vastly overrated. Yes it requires knowledge, but (a) you don't have to do it from the start (unless you're Blizzard and everything you do is an instant hit) and (b) users don't fucking care about your infrastructure that scales (that's not why they are playing your game).

</comment></comment></comment></comment></comment></comment><comment><USER36> "Reason 2 : Goldman has likely earned the lead book runner slot in any initial public offering."

When Microsoft valued Facebook at 15 billion, it was the same thing : they paid 240 million for 1.6% of the company AND running ads on Facebook (while excluding Google) AND some other things we may not know.

But people just said 1.6% for 240 million = 15 billion without taking other parts of the deal into account.

</comment><comment><USER37> Facebook is very similar to vmware. I expect it would follow a similar path in stock price. Currently vmware is trading at 140 p/e ratio. People are afraid to miss the next Google, Microsoft, etc.. SO they are willing to buy the latest trend. If facebook made $2 a year off 300M users they would have a market cap of 60B with a 100 P/E ratio.

<comment><USER38> > People are afraid to miss the next Google, Microsoft, etc

Yup, and they don't realize that it's not a winning strategy. Of course I would love to get in on the "ground floor" of the next Microsoft or Intel. Unfortunately it's like trying to get rich by buying enough lottery tickets. Sure one of them is going to be a big winner but the EV of your investment is negative.

</comment></comment><comment><USER39> > Let's just say for argument's sake that it is early stage investors who are > selling. Why would they sell? Because they're in need of cash to invest > somewhere else? The way the social network is talked about these days, it's > the best investment opportunity in town. So why would anyone want to forsake > it?

What a silly argument.

Diversification. Duh.

Even if you've got a hold of what you're certain is the biggest, bestest, most badass-est investment ever that's already gone up 20x, you'd do well to cash out a bit of it and spread that around. On the off chance something crazy happens, you're not up the creek.

I mean, that's not exactly revolutionary right? Diversify? If I owned Facebook equity now, I'd really happily cash some of it in and invest in something as uncorrelated to FB as I possibly could. Like, real estate in Bulgaria or something.

</comment><comment><USER40> On Zynga: _You think they're going to justify a $50 billion market capitalization through banner ads?_

These games actually do really well, not from banner ads but from virtual currency. Now that FB is pushing devs to use FB credits, they should be in for a healthy cut of the action.

<comment><USER38> Games like Farmville are a fad, like Rubix cube and Cabbage Patch Kids. That's not to say that casual games won't continue to an important segment of gaming, just that they will not provide an income stream that justifies a 50 billion company valuation. If it wasn't for the fact that "the market can stay irrational longer than you can stay solvent", I would short a Facebook IPO in a heartbeat.

Facebook's core value is that (nearly) everyone is on it and it is considered to be "cool". The cool aspect will not last. I'd be amused to hear any arguments as to how it possibly can. Young people _will_ move on to something else.

I also think it's very likely that their power as a centralized manager of personal contacts will be eroded over time. Really, it's not that hard of a problem and some other applications will end up being compelling enough for people to switch. They will try to prevent it (e.g. like trying to prevent GMail from exporting email addresses) but ultimately will fail.

The history of the Internet is filled with the corpses of technologies that were supposed to be "the future". Who remembers PointCast? How about Orkut? For a while RSS was touted as the solution to all of mankind's problems. ;-)

<comment><USER41> "Games like Farmville are a fad, like Rubix cube and Cabbage Patch Kids."

Well, sure they're fads. But _toys_ aren't a fad.

LOST might be a fad, but _entertaining content_ aren't a fad.

Farmville might be a fad, but Zynga is in the content business, not the Farmville business.

</comment></comment></comment><comment><USER42> If these guys precipitate a bubble burst we should all hate them.

2011 is the year Facebook growth (users, hours, page views, pick one) plateaus, it is inevitable it will happen as some point, and this is very likely the year.

<comment><USER43> we shouldn't, really. I mean, they practically /made/ the bubble, and I think we've all profited from that, even those of us who don't work for google. Demand for webapp dudes (and infrastructure) is way up because of this bubble. Hell, my own biggest account does some kind of facebook app thing.

</comment></comment><comment><USER44> Nobody has mentioned acquisition. I think it is safe to say that MSFT would be interested in FB at 50B. 100B starts to look like real money and it is hard to know who would be interested...

</comment><comment><USER45> Another reason I'm not buying Facebook:

I don't have the $10 million required by Goldman Sachs to be involved.

</comment><comment><USER46> Question: what is the point of Facebook?

Answer: monetizing friendships

<comment><USER42> 'friendships' FTFY.

</comment></comment><comment><USER47> Facebook will fade away like Hotmail.

</comment><comment><USER48> Bernanke -> Goldman -> Facebubble

</comment><comment><USER49> 1\. because this article is on CNN and our formula for getting visitors is to find a popular current event and take a controversial or contrary point of view on it.

2-5. see #1

<comment><USER50> That's a rather simplistic view of the article, don't you think?

You really think that none of the reasons are genuine, all just made up as linkbait?</comment></comment>


Debian moving away from SHA-1 - <AUTHOR> http://www.debian-administration.org/users/dkg/weblog/48

<comment><USER2> PGP is not in especially much danger due to the new results against SHA-1. The new attack is a birthday attack, not a preimage attack. PGP uses SHA-1 in several places, including some where it's "hard-wired" (i.e., parties can't specify any alternative hash algorithm), but there's only one where a birthday attack does any good: signing others' keys; this attack would work basically the same way as the one that produced the rogue SSL CA using an MD5 collision. Even here, this further requires a chosen-suffix attack, which this new advance is not; though I would not be surprised if one were discovered in the near future. Every other use of hash functions in PGP depends only on their one-wayness, not on collision-resistance.

Nonetheless, in light of the new results, the IETF Working Group on OpenPGP is likely to reconvene to produce a new version of the standard that doesn't depend on SHA-1. They're also currently discussing my suggestion to include a random salt at the beginning of the data that gets hashed for key signatures, effectively rendering the integrity of these signatures immune to birthday attacks. If this is done, and it likely will be, then PGP could probably get away even with using MD5 everywhere (not that I'm recommending this!).

If, in the interim, a chosen-suffix attack against SHA-1 is discovered, then signers can protect themselves by migrating their keys away from it as dkg advises. Also, _only newly-made key signatures would be vulnerable. Key signatures made prior to the discovery of such an attack would not be compromised_.

</comment><comment><USER3> Maybe such moves shouldn't be started after an attack is demonstrated, but as soon as something better arrives. Researchers who publish their findings are not the people to fear. Those who find successful attacks and not make it public are the dangerous ones.

<comment><AUTHOR> Indeed. Security researchers who embrace responsible disclosures should be thanked instead of being feared. Moves like these and the recent move towards eglibc from glibc really make Debian pretty progressive as a community imho.

</comment></comment><comment><USER4> Not sure how well thought out this decision is considering that SHA-1 has resisted preimage attacks for almost a decade longer than the SHA-2 family (since it is that much older).

Re-keying hundreds of developers as well as the entire Debian infrastructure seems like a pretty extreme reaction to a problem that doesn't actually exist.

<comment><USER2> I would be very surprised if there were a tractable preimage attack against either algorithm in the next hundred years.</comment></comment>