I get that, but who would want to buy a company that’s never been profitable? It smacks of a scam. “Hey, bro! Buy my company! It never managed to make any money for me, but it’ll be highly profitable for you!” Sounds like the company founder is looking to pull a fast one and laugh all the way to the bank while their investor is left holding the bag.
The only way I can see this working is if the idea is to build a large user base by offering a good user experience, i.e. not monetizing the platform very much, just enough so that it barely pays for its own operating costs. Then you sell that user base to someone else for the express purpose of shoving tons of ads down everyone’s throat. In that case it’s still a fast one, only in this scenario the users are the victims. But even then I’m skeptical. If that’s the plan, why sell the company instead of enshittifying your platform yourself?
why sell the company instead of enshittifying your platform yourself?
Because it’s a lot easier to find someone who thinks they can do it than it is to actually successfully do it yourself - as we are currently seeing with how wonderfully incompetent Spez is with Reddit.
When Yahoo bought Tumblr for $1.1 billion in 2013 - only to sell it for $3 million in 2019 - was Tumblr bringing in millions and millions of profit? No. But Yahoo thought that they would be able to make it.
Elon Musk paid $44 billion for Twitter, it hasn’t turned any profit either (and never will enough for him to get his moneys worth, but that’s just because Musk is an idiot).
But yeah, quite often it does feel like a scam. Or kinda like… gambling? You hope someone will pay a lot for your company, while they hope they can make it turn wildly profitable, both may or may not come true.
I get that, but who would want to buy a company that’s never been profitable? It smacks of a scam. “Hey, bro! Buy my company! It never managed to make any money for me, but it’ll be highly profitable for you!” Sounds like the company founder is looking to pull a fast one and laugh all the way to the bank while their investor is left holding the bag.
The only way I can see this working is if the idea is to build a large user base by offering a good user experience, i.e. not monetizing the platform very much, just enough so that it barely pays for its own operating costs. Then you sell that user base to someone else for the express purpose of shoving tons of ads down everyone’s throat. In that case it’s still a fast one, only in this scenario the users are the victims. But even then I’m skeptical. If that’s the plan, why sell the company instead of enshittifying your platform yourself?
Have you heard of
our lord and saviorenshittification?Because it’s a lot easier to find someone who thinks they can do it than it is to actually successfully do it yourself - as we are currently seeing with how wonderfully incompetent Spez is with Reddit.
When Yahoo bought Tumblr for $1.1 billion in 2013 - only to sell it for $3 million in 2019 - was Tumblr bringing in millions and millions of profit? No. But Yahoo thought that they would be able to make it.
Elon Musk paid $44 billion for Twitter, it hasn’t turned any profit either (and never will enough for him to get his moneys worth, but that’s just because Musk is an idiot).
But yeah, quite often it does feel like a scam. Or kinda like… gambling? You hope someone will pay a lot for your company, while they hope they can make it turn wildly profitable, both may or may not come true.