One of the virtues of youth is having a memory that does not falter. Luckily for me, I am young, and pay attention handsomely. I do recall a time, in the distant past, when Zillow was a DOG. This prime candidate for internet success was scorned upon far and wide, and we look at it today, in a new light. Today Zillow is adorned and cherished, while not months ago it was the scum of the earth. Congrats to those who succeeded in the trade, I am not only jealous, but wish I had not been bucked by the negative price move. Now that being said, lets take a look at this new king of the internet space to see whats next for the new internet based tech companies.
The story of Zillow was one shrouded in implausibility. Many asked, how could a company with just an internet site make money? How would they drive users to their site in the depressed housing market? Well it seems that all the critics were put in there place. What one should really take from this is that a few months ago Zillow was not making any money. They were looked at as a joke of a company, with a horrible algorithm for calculating home prices. No one believed in the story, and those who did have just recently profited handsomely.
Yelp and Zynga(to name a few), many are currently questioning there potential. Laughably some are suggesting that these companies are worth half what they are trading at now. The truth on the other hand is obvious. Zillow, the dog of last year, turned their user growth into earnings, just as these companies will do. Last year Zillow was losing money and they turned it around. Just like many of these other technology companies will do. How you must know, how will these new technology companies turn the story around? Simple, traffic equals earnings. The tech bubble of lore is gone. Technology companies can monetize users today, very handsomely at that. The new tech companies will do that, making there shareholders a killing in the process.