Friday, April 18, 2014

Tech Bubble, Cheap Services for Everyone

The Tech Bubble's Silver Lining: Cheap Services for Everyone - "Box is losing money. A lot of money. In documents it filed for its initial public offering, the cloud-storage firm disclosed this week that it took in $124 million in 2013, but spent $257 million. Its losses have grown substantially over the last two years because the vast majority of its 25 million users don’t pay anything for the company’s services. Box has hired an army of sales and marketing people in an effort to convert some of its free users into paying customers. Still, the company says it does not expect to turn a profit “for the foreseeable future.” There are two ways to think about Box’s finances. You could argue, as many have, that the losses are proof we’re in an incipient tech bubble. Box’s I.P.O. is one of the most anticipated tech offerings of the year; it is widely seen as a precursor to a raft of offerings by other start-ups selling cloud services, including Dropbox. But if investors go gaga over a company that’s losing hundreds of millions of dollars a year, doesn’t it prove we’re back to where we were in the late 1990s, with soaring valuations for companies that don’t have a solid business future?..." (read more at link above)

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