It was just a lazy, late-August summer day ahead a three-day weekend. And the worst day yet for Facebook on Wall Street. By the Friday bell, shares of FB were groveling above $18, based on continued investor skepticism over Facebook's flimsy model.
This is now a huge problem for Spotify, which is now effectively married to a company with serious monetization, valuation, and long-term survival questions. Indeed, it seems that Facebook is dragging down everyone, but Spotify has almost irreversibly structured its application around Facebook logins, sharing functionality, and other integrations.
Perhaps the more insidious tie-ins go far beyond the app, and are financially oriented. Spotify gives lip service to subscriber-based monetization and profitability, but all of that is speculative at best. The real bonanzas here have little to do with actual profitability, and everything to do with frothy IPOs and ridiculous acquisition multiples. This is a classic Silicon Valley-meets-Wall Street game, which is exactly the reason why investors like Goldman Sachs are at the table in the first place.
The question is whether a Facebook-hitched tech company will ever float again. Souring analyst sentiment, corrosive insider trading, executive departures, and a looming leadership crisis spell serious trouble for Facebook, which means Spotify's grandiose IPO and liquidation plans are also in serious trouble.
Facebook is plunging for a reason, though respectable companies sometimes have crappy stocks. The deeper question is whether Facebook is even around when we all grow up. I'm not sure anyone really knows the answer to that question.
Oz Friday, August 31, 2012
Nicely said Paul.
Supers Friday, August 31, 2012
Spotify stopped requiring a Facebook account two days ago. They added a "sign up with an e-mail address" option to their sign-up page so you don't need a Facebook account to sign up anymore.
Jerry Flattum Friday, August 31, 2012
It would do Spotify well NOT to require a remote account or 3rd party login. Damn, go direct. Seems to me the transition from Europe to the US has been clumsy for Spotify. They're up against some tough competitors.
I'm not a big fan of Facebook. LinkedIn is much more professional.
Casey Saturday, September 01, 2012
That they did. But it hidden way at the bottom lol.
The Great Oz Friday, August 31, 2012
Facebook's usefulness peaked roughly 6-months BEFORE they filed with the SEC to go public. Its called business. The ride was over and so they sold it off to make more money on the way out the door. Its now on the highway to Myspace hell. If you are new to Facebook you were late to the party.
@fingertipsmusic Saturday, September 01, 2012
Didn't we always know Spotify's 'must have a FB acct' demand was foolish? Now Spotify does too
@brookeslist Saturday, September 01, 2012
@ronstew Saturday, September 01, 2012
Casey Saturday, September 01, 2012
Look at Facebook's brother Zygna if you want to see bad. There is unrest in the Facebook empire. Facebook has enough money that it is safe to say they won't be going anywhere for a while, but the company has a lot of issues.
@calderonjacobo Sunday, September 02, 2012
Facebook es una burbuja y Spotify es un modelo de negocio con fundamento y contenido real. Spotify debería desmarcarse.
@fingertipsmusic Sunday, September 02, 2012
Didn't we always know Spotify's 'must have a FB acct' demand was foolish? Now Spotify does too.
David Tuesday, September 04, 2012
Interesting to see Spotify have raised $6.6m new money in the past few weeks at a company valuation significantly below last year's ($600m v $1.1bn). This may of course be a simple exercise of warrants or options, or it could suggest that they are surviving hand to mouth while they get their bigger raise away.
But with Facebook now valued at $38bn (and still falling) its improbable that the mooted $4bn Spotify valuation a few months ago is likely to stick.
Visitor Tuesday, September 04, 2012
I am not convinced Spotify is that great a business model, however I could at least understand how it could be valued.
I never understood how the value of Facebook was established...by pure greed?
Obtruder Wednesday, September 05, 2012
Facebook never had a sustainable model, period. This fact is now biting them in the ass, despite being huge in user base it is little on value, and now the Facebook trend is starting to pass. The IPO was the first time anyone had really seen this problem come to full light.
Their continous "reinventing" has driven people away, especially now with their awful "timelines".
I am disturbed by the amount of sites that all went with a "Log in as..." type thing. I am all for making multiple site logins easy, but I don't like being forced to hold an account on sites I hate either just to post one of my dribbling thoughts.
I hopped off a while back and never missed it. How many of your idiot friends nothing posts do you really need in your face all day? A huge distraction, and no longer worth my attention.
I think Facebook will be new new MySpace soon enough, a billion users and not even one good idea how to use it effectively.
A Concerned Artist Thursday, September 06, 2012
Good!!!! Teach those tech companies a lesson