[dorlomin]

Nope, its the way the internet has been evolving for years headed towards those kind of technologies. Think Myspace. It was intended as a way for bands to share music but basically got used as Facebook before anyone came up with facebook. There were quite a few challangers to Facebook such as Beebo before the FB got the critical mass. Facebook is practically inevitable.

Twitter is a touch more of a suprise but again the big blogging sites were getting really popular and people were using them in the same way as facebook, reducing it down to less words was a master stroke as you no longer needed a thoughtful blog post.

[Pops]

PO.com was founded on the same idea as FB, same month actually. People are social and like to think their trivial ideas and lives are important - look at my post count! LOL

I've never been to Admin's bunker but I don't think he's a plant or agent provocateur - we already have each of those positions taken for that matter.

[Shaved Monkey]

They would be mad if they didn't
Cheap intell at the flick of a mouse

[babystrangeloop]

Why did you post this in Current Events? It's not a current event.

[gollum]

I'm sure at this point they data mine facebook, probably for trends as much as any actionable intel. It's pretty useful for a government to have a real time look at how many of it's own citizens love or hate it.

[ian807]

Not necessary. For no budgetary outlay, private enterprise has provided an effective method of self-surveillance. Of course, FB and Twitter are monitored, but so is everything, including PO. We, however, are not considered a current threat (At my age, this is depressingly accurate).

[Sixstrings]

How Instagram founder Kevin Systrom became insta-rich

SAN FRANCISCO — How does a 28-year-old make $400 million in 18 months?

With the right idea at the right time in mobile apps for smartphones.

Kevin Systrom won the start-up sweepstakes this week when Facebook Inc. said it would pay $1 billion in cash and stock for his photo-sharing app maker, which has a loyal following of 30 million users but never made a dime.
http://www.chicagotribune.com/business/technology/la-fi-instagram-systrom-20120411,0,7079228.story

My point in posting this is to point out what I've been talking about for a long time -- EXTREME LEVELS OF EFFICIENCY AND MONEY POOLING INTO EVER FEWER POCKETS.

The company only has 12 employees. And yet these TWELVE EMPLOYEES have brought a return of ONE BILLION DOLLARS.

Facebook itself only has 3,000 employees while having annual revenue of $3.71 billion and valuation of ONE HUNDRED BILLION DOLLARS. This is extreme productivity. Similarly, Google is rich as God but doesn't employee many people. With all these new companies of the future, they're making gads of money but not providing employment. Same could be said for the financial sector.. so much wealth going into so few hands.

EDIT: just want to add, don't have a link on this but I heard on CNN that instagram's terms of service claim rights to use your photos. With Facebook buying them, they have rights on your photos too.

What's really been sold here are the 30 million users and their data. Also it's a defensive move by Facebook -- they're rich as God and are able to buy up any new threat whatever the cost.

[Duende]

There's a few things going on here:

First, $1 billion is a crazy amount of money. Second, I have difficulty imagining how these internet companies than produce intangible products and services could possibly be worth their valuations. That probably says more about me than anything else. But really - where is the value?

These internet companies seem to be at the heart of a new, exuberant optimism about the state of things to come. I listen to some radio shows about these tech innovators, and much of what they 'produce' are products in search of problems. I didn't ask for any of this crap; they just kind of create it and see if it sticks. And evidently some of it does.

Let me quickly run down the list of some of the top dogs:
Apple: I probably own 2 or so iPods but never use them anymore. Now I use my Droid phone as my mp3 player. As for the iPad - don't get me wrong, I like dragging my finger across a backlit screen as much as anybody, but I just can't understand the mania.
Google: I quit Google at the end of February before they instituted their Skynet maneuver. I don't miss them one bit, but I did have some issues with my phone after I shut down my gmail account.
Facebook: I have an account that I almost never check anymore. Facebook has become a reminder to me about why certain people from my past remained in my past (until Facebook came around).
Twitter: Have never used it. I really don't get this one at all. 140 character messages cannot possibly carry enough content to be of any interest to me.
Instagram: InstaWhat? Never heard of it until the other day. Congrats to the founders, though.
Groupon: Never ever offers a deal that I'm interested in. Seems to focus on higher-end stuff that still seems overpriced after the discount.

The way boosters talk about some of these companies, you'd think their gonna save the economy. But you're right, Six. These companies don't employee large numbers of people and that's what it's going to take to get the economy moving again.

It may just be my shortsightedness or pessimism, but I can't see how this phenomenon continues in the face of resource depletion and the myriad other issues coming down the road.

In the meantime, I'll continue finding this phenomenon interesting, silly, and a little strange.

[dolanbaker]

All of these products are an advertisment executives dream! The ads are right in the face of the consumers who are "actively" informing the content server their likes and dislikes etc.

Plus the fact that many of the users of these aps are in the "free spending" catagory, and are likely to buy the products advertised. Companies are paying big bucks for these services and passing the costs onto the consumers.

[The Practician]

I'm really starting to wonder myself about how internet companies can be "worth" so much. where are these billions coming from? what do they do? where do they go? Maybe this kind of crap (apps for I phones to make the pictures taken with it's 5 megapixel camera look like they were taken with a cheap camera from the 60's) Is this all there is left to "invest" in in an age where the "real" stuff that makes Western consumer society tick is no longer profitable.

I'm not usually one to make precise predictions, but we may look back on this instagram sale as the Pets.com of 2012.

[SeaGypsy]

It's revenue from advertisers. If your site gets a bazzillion hits from single cashed up 1st worlders your sidebars are worth big biccies.

[ralfy]

We live in a world where total money supply is more than a quadrillion dollars, with much of it consisting of "shadow" derivatives and future government liabilities. Almost all of it consists of numbers in accounts.

[Newfie]

Right Ralfy, money is losing its connection to "value."

Eventually it will get so out of line that the money bubble itself will burst, if something else doesn't intervene in the meantime.

After being an early adapter most of my 60 years recently I have been retreating from technology. I got off the band wagon.

It is interesting to see how fast I have been left in the dust as the cacophony careens over the next hill.

It's kinda nice sitting hear in the relative quiet, I get to see and explore some of the natural scenery they blow by.

[dorlomin]

Facebooks revenue is about $4.25 per user.

Thats right to generate is $3.7 billion it only needs to sell $4 a bit of advertising per user per year.

For that though they have some of the largest server farms in the world. The job they have is too keep some giantic (petabytes and beyond) sized huge interactive databases rolling so the users never see a glitch.

[Pretorian]

Facebooks revenue is about $4.25 per user.

Thats right to generate is $3.7 billion it only needs to sell $4 a bit of advertising per user per year.

For that though they have some of the largest server farms in the world. The job they have is too keep some giantic (petabytes and beyond) sized huge interactive databases rolling so the users never see a glitch.

1 visit per month counts as a user and more than 10% of Facebook users are in India and Indonesia. Traffic from those countries is virtually worthless, even if it comes from search engines. Especially considering that people come to Facebook simply to hang
Besides, who cares about the revenue? I could have been selling $100 bills for $99 and beat Facebook's revenue within a day.

[SeaGypsy]

Not true. Indonesia and India are hot sales points for small vehicles and high tech phones, fashion, education. Same with the rest of SE Asia. Indian friends tell me the wireless broadband there is way better than Australia's, due to our idiotic addiction to cabled service. There are more dollar millionaires in India than there are people in Australia.

[Sixstrings]

Facebook is set to go public this week, which is going to create some overnight billionaires. One of them is Eduardo Saverin, who helped start the company.

But news recently came out that Saverin has renounced his U.S. citizenship, meaning he will apparently avoid about $600 million in taxes on his new wealth.
http://www.marketplace.org/topics/business/mid-day-update/facebook-co-founder-renounces-us-citizenship

Zuckerberg will be paying $2 billion in taxes on a $5 billion stock cashout, but then he's done with taxes for life and can just take loans out on the stock instead:

But how much income tax will Mr. Zuckerberg pay on the rest of his stock that he won’t immediately sell? He need not pay any. Instead, he can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax. That’s what Lawrence J. Ellison, the chief executive of Oracle, did. He reportedly borrowed more than a billion dollars against his Oracle shares and bought one of the most expensive yachts in the world.

If Mr. Zuckerberg never sells his shares, he can avoid all income tax and then, on his death, pass on his shares to his heirs. When they sell them, they will be taxed only on any appreciation in value since his death.
http://www.nytimes.com/2012/02/08/opinion/the-zuckerberg-tax.html

This is unfair to other kinds of high earners who aren't paid in stocks:

Now compare Mr. Zuckerberg with Lady Gaga. Last year she told Ellen DeGeneres that she had to get “completely wasted” to sign her tax returns because she owed so much. Lady Gaga reportedly earned $90 million in 2010. Because she earns fees and royalties, she’s subject to the highest income-tax rate. So, assuming she’s just as successful this year, she will certainly pay more than $30 million in taxes and probably more than $45 million, which is infinitely more tax than Mr. Zuckerberg will pay on the $23 billion of Facebook stock he now holds.

Why is this?

Our tax system is based on the concept of “realization.” Individuals are not taxed until they actually sell property and realize their gains. But this system makes less sense for the publicly traded stocks of the superwealthy. A drastic change is necessary to fix this fundamental flaw in our tax system and finally require people like Warren E. Buffett, Mr. Ellison and others to pay at least a little income tax on their unsold shares. The fix is called mark-to-market taxation.

For individuals and married couples who earn, say, more than $2.2 million in income, or own $5.7 million or more in publicly traded securities (representing the top 0.1 percent of families), the appreciation in their publicly traded stock and securities would be “marked to market” and taxed annually as if they had sold their positions at year’s end, regardless of whether the securities were actually sold. The tax could be imposed at long-term capital gains rates so tax rates would stay as they were.

We could call this tax the “Zuckerberg tax.” Under it, Mr. Zuckerberg would owe an additional $3.45 billion when Facebook went public (that’s 15 percent of the value of the roughly $23 billion of stock he owns). He could sell some shares to pay the tax (and would be left with over $20 billion of Facebook stock after tax), or borrow to pay the tax.

If his Facebook shares decline in value next year, he’d get a refund.

President Obama has proposed a “Buffett rule” that would require millionaires to pay tax at a 30 percent effective minimum rate. Under the rule, Mr. Buffett’s taxes might have doubled to $12 million in 2010, but this would represent only a trivial amount of additional tax for him. If the Buffett rule applied in 2010, Mr. Buffett’s effective tax rate would be only about 2/100 of 1 percent on the $8 billion in appreciation of his holdings. A Zuckerberg tax would be far better: under it Mr. Buffett would have paid $1.2 billion in tax in 2010.

A mark-to-market system of taxation on the top one-tenth of 1 percent would raise hundreds of billions of dollars of new revenue over the next 10 years. The new revenue could be used to lower payroll taxes, extend the George W. Bush tax cuts, repeal the alternative minimum tax, reduce the budget deficit, prevent military cuts or a combination of all of these.

This tax would not affect the middle class, or even most wealthy Americans. Nor would it affect small-business owners. It would affect only individuals who were undeniably, extraordinarily rich. Only publicly traded stock would be marked to market.
http://www.nytimes.com/2012/02/08/opinion/the-zuckerberg-tax.html

Well that sounds very reasonable ^^, let's start taxing the super-rich billionaires and their Scrooge McDuck piles of stock worth hundreds of billions they never pay tax on (they just take out loans against the stock instead, or pass it to their heirs and then it's not taxed except on any appreciation since death). But the super-rich run this country so that will never happen. Not even Obama wants to do this "mark to market" idea, Obama would raised Buffet's taxes by an infinitesimally small amount compared to his gargantuan wealth. $13 million is is nothing to billionaires. But Republicans won't even allow that.

Meanwhile, on top of all this, Facebook itself may be set to now avoid paying taxes for years (due to the stock cashouts):

When, as Facebook expects, the 187 million stock options are cashed in this year, Facebook will get $7.5 billion in tax deductions (which will reduce the company’s federal and state taxes by $3 billion). According to Facebook, these tax deductions should exceed the company’s U.S. taxable 2012 income and result in a net operating loss (NOL) that can then be carried back to the preceding two years to offset its past taxes, resulting in a refund of up to $500 million.

“When profitable corporations can use the stock option tax deduction to pay zero corporate income taxes for years on end, average taxpayers are forced to pick up the tax burden,” said Sen. Carl Levin (D-MI). “It isn’t right, and we can’t afford it.” This tax preference for corporations costs the U.S. about $2 billion in revenue per year.

In addition, Zuckerberg’s using a totally legal accounting gimmick to transfer money to his unborn children, thus avoiding the gift tax. He also — by virtue of accepting a $1 dollar salary and purely living off his wealth — could be eligible for the Earned Income Tax Credit, which is intended to benefit low-income Americans.
http://thinkprogress.org/economy/2012/05/15/484452/facebook-zuckerberg-avoid-taxes/

In addition, because Zuck has his pay set at $1, he actually qualifies for the Earned Income Credit for the working poor.

Republicans are calling Saverin is a hero for renouncing his citizenship. Republicans apparently think even our super-low tax rates on those paid in stocks is too high. Republicans apparently believe roads grow on trees, and our world class military is paid for with pixie dust no need to tax anyone.

Republicans are for deficit spending and money printing, because they'll never tax corps and the rich, that's the bottom line.

[mattduke]

Clearly he should not be allowed to leave. Build the Freedom Wall higher. Obama needs this amount for air conditioning for US troops in Afghanistan. Starving the war machine is your duty as a human being, war slave.

[Sixstrings]

Clearly he should not be allowed to leave. Build the Freedom Wall higher. Obama needs this amount for air conditioning for US troops in Afghanistan. Starving the war machine is your duty as a human being, war slave.

Well..

The US didn't have to take him in when he was a refugee from Brazil. But yeah Matt, he's free to leave, just as Steve Wynn was free to pull out of Vegas and move to China, just as Mitt Romney was free to use Swiss and Cayman island tax shelters.

All the rich are free as a bird, and money to fund the government just grows on trees.

[efarmer]

There is an honorable way to accomplish this same thing. You stay an American, you take some millions and put it into a SuperPAC. It is sloppier, but you create a candidate via media buys and spirit them into power, once there, they give you and your industry a gravy train deal or tax exemption and your patriotism is rewarded.

The little people after all, need the top 1% to pick them candidates, and tell them what to do once installed and gladly tile up tax dollars in return. It is what we little people do, and we are good at it. The little people don't roll like this for "Durn Furiners" we need role models with a factory in China, money in the Cayman's, and a dozen or more marionettes in Washington D.C. in position to macrame' the people's purse strings for them.

Facebook has allowed us to know what our nearest and dearest are eating for lunch, what TV shows they are watching, and where they sat at concerts and sporting events so we can be jealous as hell. What is even better, is you get to make it up when you post.
Efarmer:

" went to the Hockey Playoffs again last night in a limo with four gorgeous gals, and as usual, he had box seats right behind home plate. Lucky sucker brought his glove and caught 7 pucks which he sold on Ebay for $300 each and made a cool grand on the game to boot."

What's on your mind?