Moneybox: The Great Bubble Bubble

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Moneybox The Great Bubble Bubble Reports of a social media bubble are greatly exaggerated. By Will Oremus Posted Friday, Nov 04, 2011, at 02:50 AM ET Groupon, the startup that peppers bargain-seekers' inboxes with local deals on everything from paintball to pedicures, is going public on Friday. It's offering shares at $20 each, implying that the company is worth some $12.7 billion. That's a lot of money—but it's a long way from the $30 billion giddy executives envisioned just months ago. And it's hardly evidence of a bubble. To read the media's coverage of the initial public offering, though, you might think this Web-coupon company's IPO augurs the next economic apocalypse. "Groupon Is a Disaster," blared a headline on Business Insider. A CNN Money article called the IPO "reminiscent of the dot-com bubble" and quoted an accounting professor saying, "We've seen this game before and we know how it's going to end." The cover of a July issue of Barron's magazine announced simply: "Yes, It's a Bubble!" Adding fuel to the bonfire of social media vanities is the disappointing performance of LinkedIn, the business-oriented social network whose May IPO was the largest since Google's in 2004. The company announced Thursday that it lost $1.6 million in the most recent quarter, after posting profits of $4 million in the corresponding time period a year ago. All of which might lead casual observers to suspect that the phrase social media will be uttered three years from now in the rueful tones with which one says "subprime mortgages" or "Kozmo.com" today. They can relax ... To continue reading, click here. Join the Fray: our reader discussion forum What did you think of this article? POST A MESSAGE | READ MESSAGES Also In Slate MTV's Occupy Wall Street Show Is Full of Naïve Twerps Civil Rights Lawsuits Are No Longer the Best Way To Fight the Social Problems Facing Black Americans Did Chanel Have Snooki in Mind When It Named Its New Fragrance "Jersey"?	Advertisement
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