Friday, August 5, 2011

Congress leaves us hanging, and Tech companies have all the money.

In the days after the crisis of a US default being remedied, the market is still collapsing, and August 4th was one of the worst single days in stock market history. All the hard work Congress put in didn't do much to help the investor or those counting on their retirements to support them in their golden years.

So what do your representatives do, in this time of economic crisis? They go on vacation. Early.

Job numbers are ghastly. When jobs are bad, we try to get more educated. Good luck, seeing as the cost of education has outpaced just about every other comparable sector.

So, in times of crisis, there are no jobs, you can't pay for school, and Congress is on vacation. What to do?

What seems interesting is where the actual money is, and what people are spending it on.
Apple allegedly has more money than the US Government. Or maybe it does not. Either way, tech companies, your Apple/Google/Facebooks of the world have a ton of money, and they take in more than they spend, unlike the U.S. Government. But what, in real terms, are they adding to our economy, except distractions and ipads?

Here is an excerpt from the Founder of Facebook's sister, Randi Zuckerberg, on leaving the most profitable website in history and starting her own new venture:

"My goal is to launch my own innovative programming and work with media companies to develop their programming in new, and more social ways."

What does that even mean? Her brother is one of the world's youngest billionaires, and I have no doubt she is also independently wealthy, and will only become more so as a result of her new venture. But why?

These companies don't make guns or butter. They do not grow corn or pave roads. If your power goes out, your computer crashes, or your internet slows down, they disappear.

However, as much as I despise them, these internet companies and "social media" outlets have become a necessary expenditure for business and commerce. Society now spends the bulk of their waking hours using some form of media. The phone book is becoming obsolete, so now you "google" things or see what sort of review a business has online. If you are invisible in that world, someone else will gladly take what could have been your clients and make them their own (hence why, after years of being anti-website/blog, I made a blog).

Wait, I thought Google and facebook were free? How do you think these companies make money? Advertising, and it isn't cheap.

The story I always heard was the back of the phonebook lawyer gets 80% of the fist calls, the next guy gets 15%, and everybody else picks up the scraps. After reviewing one facet of my own firm's internet advertising, I discovered we were paying about $400 per actual view or click from a potential client, and of those views,  this avenue had generated a grand total of 0 clients since we started using it in 2008.

The takeaway: when thinking of your retirement or how to make your current business grow, there are a slew of new marketing, advertising, and customer feedback mechanism's available. I am very against buying into the hype of Paying a Randi Zuckerberg or the like a king's ransom to develop my company in "new, and more social ways," but maybe that is what is necessary to compete in an internet-driven world. Talk to a professional before you make any decisions, and then talk to a couple more.

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