I read quite possibly the dumbest op-ed of 2012 yesterday in the Wall Street Journal. To be blunt, I found it intellectually lazy, completely off-topic, and full of ludicrous arguments that make no sense.
The title of the op-ed was “Air Jordan and the 1%,” and the subject matter was about income inequality in the U.S.
As you can tell, I have some rather strong views on the subject so I’ve pasted the article below with my commentary on what the author, Mr. Schoenfeld, either missed or ignored.
Let’s get started (my responses are in bold).
What does Michael Jordan tell us about income inequality in the United States?
The introduction is pretty decent - it got me hooked right away. I love Michael Jordan and I think income inequality is a huge issue. Although, my gut instinct is that the obvious answer to this question is absolutely nothing.
The U.S. has greater income inequality than nearly all other developed nations, and the former basketball star earned far more in most years than the typical American earns in a lifetime. So is our system unfair and stacked against the middle class?
There is no connection between U.S. income inequality and the salary of sports stars. This paragraph (and the rest of this article) is a “straw man” argument - the author never directly talks about the heart of the income inequality issue (which I’ll get in to below). Instead, he focuses on a series of catchy, but irrelevant, arguments that have no relevance in the income inequality discussion in order to try and disprove the serious consequences of income inequality.
No rational person compares the salary of the best NBA player the world has ever seen to the salary of a typical American. Not many people are arguing that the two should be comparable.
The author is trying to make income inequality seem like a non-issue by comparing it to something completely irrelevant.
First, some historical perspective.
Excellent. Let’s see what enlightening facts Mr. Schoenfeld can find to bolster his argument.
“From the time of Pericles until the end of the 18th century in London—2,300 years,” notes Harvard Prof. Lawrence Summers, “standards of living on Earth increased perhaps 100%.” In the U.S. since 1790, by contrast, real per capita gross domestic product has increased nearly 4,000%. Quality of life, in other words, increased 40 times more in 220 years of American history than it had globally over two millennia. In 2012, a typical American in the bottom fifth of the income distribution has a far higher quality of life—and life expectancy—than the average member of the top 1% in 1790.
Awesome. I don’t disagree with any of these facts. But everything the author just wrote is completely irrelevant to a discussion of income inequality. The GDP statistic sounds impressive but GDP is not a measure of income.
Income inequality is the unequal distribution of household or individual income across the various participants in an economy - it is not measured by quality of life, life expectancy or GDP. While important and worthy of serious discussion, these topics that Mr. Schoenfeld focuses on are completely separate from income inequality.
A true analysis of income inequality should focus on the disparity in income between different participants in the economy (i.e. workers vs CEO, poor vs. middle class vs. 1%, different ethnicities, men vs. women, etc.).
Critics today often point to the 1950s as the last years before American society became so divided between haves and have-nots. At the end of that decade, America’s “Gini coefficient”—the most common measure of income inequality, running from 0 (least unequal) to 1 (most unequal)—was 0.37. Today it is 0.45.
Thanks for providing some context around what this statistic means. An increase from 0.37 to 0.45 might not seem impressive, but that’s because Mr. Schoenfeld neglects to tell us that this places the U.S. 93rd in the world in “income inequality.” That places the U.S. behind India, China, and even Iran.
So, yeah…we’re doing great, huh? Nothing to see here…no possible way that income inequality might be an important issue, right?
But in 1959, more than 20% of families fell below the poverty line. In 2010 that figure was just over 13%. Real per capita GDP today is 270% higher than it was in 1959. A family in the bottom fifth of the income distribution today makes the same amount in real terms as a family earning the median income in 1950. So inequality might have increased, but so too—dramatically—has quality of life.
Even over the last two decades, while real income has essentially stagnated for the bottom fifth of earners, basic conveniences have become far more affordable. In 1992, only 20% of American families below the poverty line had a dishwasher—50% had air conditioning and 60% owned a microwave. When the Census Bureau last surveyed these figures in 2005, those figures were 37%, 79% and 91%, respectively. Critics who minimize the importance of these conveniences likely have never had to do without them.
Again, so what (in terms of income inequality)? Just because quality of life has improved somewhat doesn’t mean that we don’t have an income inequality problem (sorry for the double negative).
How about focusing on the fact that social mobility is at an all-time low, which means that is much harder to break into a “higher” class than ever before.
Or how about any stat on CEO pay vs. employee pay, maybe something like the fact that from 1978 to 2011, CEO pay increased 726.7%, the S&P 500 increased 349.1%, and worker pay increased a whopping 5.7%? Or that CEOs make over 231x more than employees in 2011, up dramatically from 20x more in 1965?
Obviously a CEO deserves to make significantly more than the average worker, but this disparate growth in compensation is a crucial, topical issue that is never addressed in the op-ed. Even if Mr. Schoenfeld disagrees with my views on CEO vs. employee pay, he clearly should have brought the topic up in his discussion of income inequality. But no, he was too busy trying to make far-fetched analogies to Michael Jordan. Let’s take a look.
And that brings us to Michael Jordan, who starred for the Chicago Bulls from 1984 to 1998. In 1986, the Bulls’ median player salary was $300,000. The team’s lowest-paid player made $135,000, and its highest-paid player made $806,000. The team’s Gini coefficient was 0.36. But Jordan’s superstardom increased the team’s popularity and revenues, and by 1998 salaries looked different. The median income was $2.3 million, the lowest was $500,000, and the highest (Jordan’s) was $33 million. The Gini coefficient had nearly doubled, to 0.67.
Jordan’s salary of $33 million consumed over half the payroll, but everyone was better off. The median player in 1998 made more than seven times what the median player made in 1986, while the income of the lowest-paid player in 1998 quadrupled that of his 1986 peer.
There is so much wrong with this argument.
A basketball team has at most 15 players. This is not a relevant sample size.
Also, there is a salary cap in the NBA, which means that there is not a free market for labor. This is inconsistent with the way our general labor system works in the U.S. - yet another reason this whole “sports team” line of argument is idiotic and completely irrelevant for 99.9% of Americans.
Jordan’s superstardom had nothing directly to do with salary increases for his teammates - that was due to annual increases in the salary cap. In fact, Jordan’s outsized salary (which I would argue he deserved), actually hurt some of his teammates. For example, in 1998, Scottie Pippen made less than $3 million per year. He is one of the 50 greatest players of all-time, was still in his prime in 1998 (albeit near the end of it), and yet he was dramatically underpaid relative to his peers for the majority of his career.
This whole sports analogy makes no sense no matter how Mr. Schoenfeld tries to spin it.
Detractors would suggest that this situation is anomalous to sports, that many of today’s wealthy inherited their money or acquired it without adding commensurate value to society. But consider another basketball player, Rashard Lewis of the Washington Wizards.
Haha. This should be good. Rashard Lewis’s contract is one of the biggest jokes in NBA history. Contracts like his are a big reason why the NBA lockout happened last year.
Lewis was the second-highest paid player in the National Basketball Association in 2012, making $22.1 million—even though he appeared in fewer than half of his team’s games and performed poorly when he did. Is it fair that Lewis was compensated so handsomely?
I mean, check out this excerpt from a Grantland article last year:
Lewis is a gauge for how you view the lockout. Right or wrong, he is the poster player for the league’s doomed economic model — a decent and grossly overpaid player. “Talk to the owner. He gave me the deal,” Lewis recently told theWashington Post’s Michael Lee. “When it comes to contracts, the players aren’t sitting there negotiating that contract. I’m sitting at home and my agent calls me, saying, ‘I got a max on the table.’ I’m not going to sit there and say, ‘Naw, that’s too much. Go out there and negotiate $20 or $30 [million] less.’
This is exactly the defense of most CEOs. As long as Boards are willing to give extravagant compensation packages, CEOs aren’t going to say no.
More pertinently, if his team could repossess a portion of his salary and redistribute it more “fairly” to deserving players following the season, would it benefit the franchise?
Hell yes it would. That way you wouldn’t overpay an average player an extra $10-$15 million per year.
Perhaps it would in the short term, as the team could reward players and temporarily strengthen morale. But top players would be disincentivized to play for the team in the future, knowing that such repossession could also happen to them. And without an objective measure of overall player performance, the team could one day decide that even a high-performing player was overcompensated and therefore should see some of his proceeds redistributed to his teammates. The team would quickly become uncompetitive.
Oh, so you’re talking about “clawing back” money from players (and by extension the 1%). While tempting, I agree there are a host of issues with trying to claw back money from players or executives and this is not a prudent or feasible action to take.
But you’re admitting that Lewis (and by extension, some of the 1%) are overpaid and not worthy of their contracts. Isn’t the logical step TO STOP PAYING THEM SO MUCH IN THEIR NEXT CONTRACT. The NBA solves this by not giving overpaid players a massive contract when they are free agents.
Let’s set aside the flaws in Mr. Schoenfeld’s analysis of the motivation of a basketball team because there are too many and I’m getting tired. (Okay, I couldn’t resist, here’s one - the real reason the team would be uncompetitive is that they overpaid for an average player. If they had better allocated their resources they would be able to acquire more talent to win)
Certainly there are reasons for concern if lower-income Americans aren’t able to save or acquire sufficient capital to pursue innovative ideas, or to see their children attend decent schools. They will suffer, and the country will lose out on significant intellectual capital and growth opportunities. But this should not be confused with inequality.
It’s a little late in the op-ed to start showing a heart, isn’t it? But even here, Mr. Schoenfeld comes across as way out of touch. I doubt that most lower-income Americans are primarily concerned about “acquiring sufficient capital to pursue innovative ideas”. Instead, they have to worry about buying groceries, paying rent, going to the doctor, etc.
Investing in the next Facebook probably isn’t on the top of their concerns.
Equality is not a good in itself and shouldn’t be analyzed in a vacuum. If we remember that, perhaps a century from now low-income Americans will pity the living standards of today’s 1%.
I sincerely doubt that.
I totally agree that equality shouldn’t be analyzed in a vacuum. But it also deserves to be analyzed fairly with rational arguments, and I just didn’t see evidence of that in this op-ed.
Mr. Schoenfeld is a recent graduate of Harvard Law School.
Congratulations. Seriously, I don’t mean to disparage Mr. Schoenfeld personally in any way. I don’t know the guy, and graduating from Harvard Law is an impressive achievement.
It just pisses me off that something this intellectually lazy and dumb appeared as an op-ed in one of the most respected papers in the world. Millions of people were potentially exposed to this article and I think it’s a shame that they at best, didn’t learn a damn thing, and at worst, came away with the idea that income inequality is not a serious issue because of some flawed sports analogy.
Income inequality is a huge issue in the U.S. I realize that is politically charged, but it deserves a level of discourse significantly higher than what appeared in the Wall Street Journal yesterday.
Interns mess up a lot. It’s a fact. They can’t help it, and a lot of times it’s not entirely their fault. Obviously, however, there are certain mistakes that are worse than others.
Our interns have been working hard for almost 6 weeks now. They’ve been through a week of classroom training and have had 5 weeks to learn on the job. We review our interns halfway through their internship, so last week I was asked to provide some feedback for the interns that were stuck working on deals with me.
To make sure I wasn’t being too harsh on them, I thought back to my internship experience 4 short years ago, which was at the same company where I currently work.
The biggest lesson I learned was
always go out drinking with the full-time employees when they offer never make the same mistake twice.
There’s nothing wrong with making mistakes. In fact, they often are the best way to learn. Many times it’s not even your fault - how are you supposed to know the first time which way a certain boss likes his spreadsheets formatted?
You’ll be fine as long as you make sure that you focus intently on fixing the mistake the next time you’re working on a similar assignment.
So what’s the big problem with making the same mistake twice? It sends a terrible signal about your ability. Logically, either:
While this may be sound harsh, it’s definitely the way people react to seeing the same mistake over and over again. It doesn’t matter if you actually are smart or a diligent worker, if other people have the impression that you are dumb or lazy they won’t want to work with you or hire you.
Both of these would be major red flags in any job but are especially problematic for investment banking. If you can’t be trusted to learn from your mistakes, how can your boss trust you to handle a new challenge you haven’t been exposed to before?
Here are some suggestions on how to prevent making the same mistake again:
Good luck. (And seriously, when any full-time employee asks an intern to grab a coffee or a drink with them you should go!)
Anyone have any other “worst” mistakes you can make as an intern?
So I think I was being a pretty big drama queen earlier this week when I was
bitching and moaning complaining about my apprehension about starting a 3 day juice cleanse on Tuesday.
I just finished the cleanse last night, and it was ridiculously easy and went much better than I expected. The juices actually tasted good, I never felt miserable or even bad, I wasn’t really ever too hungry, and I never cheated by eating a few slices of cucumber, 1/4 of an avocado. or anything else on the “Cheat Sheet” that Blue Print provides.
My biggest takeaway from the juice cleanse is that Mind > Body. I know it is a tired cliche, but once I took a positive attitude and decided that I wasn’t going to be hungry or start eating, the time seemed to flow by and I never really had any issues. I guess now that it’s been 7 or 8 years since pledging it was “nice” to have a reminder of the power of the mind over body.
Here are some further takeaways from my juice cleanse experience:
Anyway, despite the lack of any tangible benefits, I’m glad that I did the juice cleanse, if only for reinforcing the message that Your Mind is Greater than Your Body. And to say that I’ve gone 3 days without food.
Unlike Katniss, Day 1 of my own personal 3-day Hunger Games was a relative breeze. Here is a quick update on how it is going so far.
The first day has actually been a lot easier than I expected.
It really wasn’t that hard to not eat food during the day as the only temptation came when people came back to their cubicles with their lunch.
I think the only time my stomach growled was when I could pick up the scent of someone’s MSG-filled Chinese food or coma-inducing Chipotle burrito. Fortunately for me, a bunch of coworkers not participating in the cleanse ordered a bunch of steak for dinner, which had zero appeal to me.
Initially, I was apprehensive that the juices were going to taste disgusting but I was very pleasantly surprised to find they actually don’t taste that bad.
Also, per the advice of the website and numerous friends, I’ve been drinking a ton of water which helps to fill me up. This of course has the side effect of significantly increasing the frequency of my trips to the urinal but on the upside my pee was clear.
So far the cleanse seems to be going pretty well, but I have a feeling that the latter half of the 2nd day is going to be the worst part.
Thanks to everyone who provided advice and/or support, I really appreciate it.
You know that terrible feeling you get when you make a decision to start something you know will be challenging, and as the start date approaches, you begin to regret your decision more and more?
Well, for 7 of my male* coworkers and I that dreaded start date is today and for some god forsaken reason we are starting a 3 day juice cleanse called BluePrintCleanse.
* For some reason I think that’s relevant
This seemed like a much better idea in theory when we first started joking around about doing it a few weeks ago. I still don’t really know how or why we all agreed to do this.
To be honest, I should have known what I was getting myself into. One guy sent around an article raising some doubts about the cleanse but I guess I ignored it and thought this endeavor would be a pretty easy way to drop a few lbs to get ready for beach season.
It wasn’t until I actually checked out the site and saw the full details that I realized this is probably going to be a pretty miserable 3 day stretch.
Also, so apparently you’re supposed to prepare for a cleanse for 3 days in advance of the actual cleanse by weaning yourself off of coffee, the sugar, the meat and the dairy, and adding fresh fruit, greens and veggies at every meal. Luckily for me, I’m a vegetarian and I’m out of milk and candy, so I indirectly have fulfilled most of these requirements and am somewhat prepared for the cleanse.
But the most terrifying part is this question of the Frequently Asked Questions:
Q: We haven’t gone to the bathroom at all, and we’re on day two. Is that normal? Is this safe?
A: This and the opposite are completely normal side effects of the BluePrintCleanse and one of the reasons to schedule a colonic. Reduced input means reduced output.
Nothing about that answer sounds appealing in any way.
Hopefully it won’t be as bad as it seems and I actually come out of it feeling “cleansed” and refreshed but the early signs aren’t looking too great.
In any case, the juice has been bought and there’s nothing more to do than fight through it and try and maintain a positive attitude…sort of like during pledging.
Have you ever been to a nice dinner with 7 great friends? The food is great, the wine is flowing, and the jokes are flying back and forth. The last thing you want to do at the end (or start) of a great evening is spend 15 minutes collecting money from each person or waiting for the poor waiter to have to run 8 separate credit cards through the slow-as-hell machine while he silently seethes at how he should have spit in your food when he had the chance.
Or let’s say you’re running an *unofficial* NCAA tournament pool and need to collect money from 50 of your frat bros who are spread out across the country? What do you do?
I recently came across a brilliant new app called Venmo that seems to have solved all of these problems. Venmo is a quick, simple, fun, and FREE way to pay your friends using your mobile phone.
When I was showing the app to someone last week at a bar, I whipped out my phone and paid a friend in less than 15 seconds.
As you can see below, Venmo tracks your payments and shows your payments as well as those of your friends (although you can choose to make a transaction private if you’d like).
There are several other apps (like Venmo and the big-boy PayPal) that do what Venmo does. Here are a couple probably dumb ideas that Venmo could implement to help them differentiate themselves from their mobile payment competitors.
1. Add a Leaderboard - I floated this idea with some friends last week and they all agreed it would be fun to have some “Superlative” type awards like:
3. Track potential payments before processing payments (i.e a Tab) - Perhaps have a way to keep track of payments before paying. This would be useful if I’m at a bar with a few friends and don’t want to exchange cash right away after each round but also don’t want to let that one cheapskate friend who never buys a round off the hook. It would be great if Venmo had a way to privately keep track of who paid what and then settle up with one simple transaction at the end of the night.
4. Add Instagram Functionality - To truly make Venmo social it would be really cool to have people take pictures of what they are buying / paying for (when appropriate) and incorporate it to the Payments stream in the app.
5. Partner with Foursquare - Foursquare collects a ton of valuable data from its users but doesn’t have a way of figuring out how much their customers are spending at each location they check into. A Venmo-Foursquare partnership could a great way to garner valuable information on how much money is spent per user at specific locations.
6. Partner with Small Businesses - If local businesses can get customers to pay via phones from their bank accounts and not credit cards, they may be able to save significant amounts of money (as long as the fee is less than the credit card fee)
7. Target Fantasy Sports - Venmo could solve a major issue that fantasy sports leagues have - timely payment of funds. While I don’t really think it technically is legal to collect and pay out money for fantasy leagues, the reality is that fantasy sports are a billion dollar industry. Venmo is one of the easiest ways I know of transferring money to the League Commissioner at the beginning of the season and then having him/her payout the money in a timely manner throughout the year.
Venmo is a fantastic product that I love and frequently use. It is easy yet extremely effective. My only concern is how Venmo can generate sufficient revenue. I’ve used it 8 times and don’t believe that Venmo has made a penny on any of those transactions. Now as a customer, I love this, but as an impartial observer of the Company it does raise some potential concerns as Venmo starts to actively try and generate revenue (a recent press article said that the company was currently focusing on the product and that “that the app may eventually allow individuals to pay bars and restaurants, for example, and in that case Venmo would charge the merchants a small fee”.
If you haven’t used Venmo, download it and try it out. It really is a great app.
Note: An earlier version of this post had screenshots from my Venmo account that did not show up correctly. Thanks to Steve Giordano for pointing this out.
Ok, let’s be honest. There are a ton of reasons why I’m an idiot, but in the interest of time (and my ego) I’m going to focus on just one of them today. (Don’t worry, I’m sure I’ll bring up many more of them in the future).
After my brilliant (but cheezily titled) post last week that tried to warn everyone to use some caution before investing in Facebook on the day it IPO’d, I went ahead and ignored my own advice, bought some shares, and gambled that Facebook would pop.
I was wrong. Spectacularly wrong.
The IPO price was $38, and the stock reached a high at $45 around 11:30am on Friday, May 18, before quickly falling back to $38. The stock briefly got back up to around $41 or $42 before closing up only $0.23 at $38.23. This was very unexpected as most people expected there to be a significant pop in the stock price on day 1.
The real carnage happened after the weekend on Monday, as the stock closed at $34.03, down 10.99% from Friday’s close and down a staggering 24.38% from the high of $45 during the day on Friday.
The only good news is that it turns out my prediction to be cautious was pretty spot on, so at least I have that going for me.
Okay, so let’s try and figure out what does the last two trading days tell us about Facebook’s IPO:
In any case, it has been quite a while since an IPO garnered as much publicity as Facebook and it has been fascinating to follow the mainstream attention it has received. When Facebook releases their quarterly earnings I will likely write another post about the Company to see how they are doing.
Everyone is talking about Facebook’s IPO that is taking place tomorrow. I went to a wedding last weekend and people ranging from my parents to my friends to the DJ (ok maybe not him) were discussing the IPO and whether they should try and buy the stock.
I told everyone the same thing - if you buy Facebook’s stock tomorrow you are doing the equivalent of putting your money on black or red and spinning the roulette wheel.
Now, I am NOT saying that I think buying Facebook stock is a bad idea - in fact, I might buy some tomorrow. What I am saying is that: a) facebook is a risky company to invest in at the current valuation, and b) buying its stock on the day it IPO’s is extremely risky due to what I expect will be massive swings in the stock price tomorrow.
The appeal of getting in on tomorrow’s IPO is obvious - wealthy investors have been trying for years to get their hands on Facebook stock through private stock sales via services like SecondMarket and have been berating their brokers for the past 6 months to get a piece of the IPO at the IPO price, which has apparently been set at $38/share. The IPO Price is the price at which Facebook sells its stock to hedge funds, institutional investors (mutual funds, pension funds, etc.), and the 1 percent (aka high net worth individuals). These stock sales occur before the market opens tomorrow.
For the rest of us poor shmucks who don’t have millions in the bank, there is zero chance of getting in at Facebook’s IPO Price of $38 so we have to wait until the market opens at 9:30 AM tomorrow morning and Facebook starts officially trading on the NASDAQ before we can buy Facebook.
However, since there is so much demand for Facebook stock, it is very likely that Facebook’s stock will open at a price higher (or significantly higher) than the $38 IPO price. And recent data shows that recent tech IPOs have tended not to live up to their initial hype.
CNN has a great article that highlights some of the risks of investing in Tech IPOs.
Of the 31 Internet IPOs held since the beginning of 2011, 22 are currently trading below their closing price on the day they went public. Here’s an even scarier stat: 16 are trading below their offer price.
Now to be fair, these 31 IPOs did pop a collective 34% on the day they went public. But this proves my point about how risky it is to buy a stock on its IPO day.
Let’s use an example. pretend Initech has an IPO price of $100. Since there is so much demand for the company’s stock, the stock begins trading at $120 (up 20%). During the day, the stock shoots up to $150 by noon. But some intern bought some traders a crappy lunch, so by 1:30 the stock is down to $110. But then they realize that it’s Friday, the weekend is coming, and it’s time to party so the stock shoots all the way up to $175. Four months later, when the initial excitement died down, the stock is now trading at a measly $68.
Sound unrealistic? Who knows. The recent tech IPOs have shown that anything can happen on day 1, and that stock prices don’t always keep going up. If you had bought Initech at the end of the IPO Day around $170, you would be kicking yourself after 4 months.
Here is my advice - Know your risk tolerance. I’m 25, I have a lifetime (hopefully) of earning potential, and I may or may not have won a little money playing blackjack at a casino in Colorado last night. I can afford to take the risk.
If you aren’t willing to lose a substantial portion of your investment, I would recommend not investing in Facebook tomorrow. Or at least don’t put the whole amount you want to ultimately put in.
Sure, there is a great chance the stock might pop 25% or 50% or 100% tomorrow, but who knows how sustainable it will be.
If you’re going to buy Facebook tomorrow, remember that you’re playing in a casino and you have a 50/50 shot of landing in the black or red.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment.
- Image from Thinkstock/CNNMoney
These acquisitions highlight the recent trend of large, established Web-based companies dramatically expanding their mobile presence.
Instagram had a real chance at being the world’s mobile-only social network, hitting more than 30 million users in a little under two years. Which is why Zuck rapidly panicquired it after it received funding on Thursday, doing the deal in a weekend according to what we’ve heard. Same thing with Zynga target OMGPop, which was showing similar potential for mobile market domination as it overcame the Zynga games in the App Store.
While we can debate whether Instagram and OMGPOP sold too soon (in my opinion both companies made the right decision to sell at their respective price points), there is no doubt why they made attractive targets for Facebook and Zynga.
As Business Insider’s detailed presentation on the Future of Mobile points out, in a couple of years the number of mobile phones will dwarf the number of PCs. While we may think smart phones are already ubiquitous, there still is massive growth potential in this market as more traditional cell phone users see the appeal of smart phones and switch to have a better mobile experience.
We are only going to spend more time on our phones going online, interacting with friends, being terrible at Temple Run and Draw Something (like me), and paying for everything with our phones. While mobile advertising has yet to be perfected, it is clear that mobile phones will play a crucial role in the future of tech companies.
Zynga will be able to use OMGPop to build out its mobile gaming team, and Facebook can use Instagram to supplement its mobile app and “own” photo-sharing. These acquisitions have allowed both companies to become the dominant, go-to company in the gaming and photo-sharing fields.
I think the next industry a giant, web-based tech company is going to pursue is mobile finance. Companies such as Venmo, Dwolla, and Square are attempting to figure out ways to make mobile payments easier for customers and businesses, and I think companies like Amazon and Apple want to figure out a way to have a simple, seamless way to pay for everything on your mobile phone. I can definitely see one of these mobile payment companies being acquired by a web company that wants to expand its presence on your mobile phone.