Usually, I get a polite, ‘it’s top secret’ mumbo-jumbo or an even politer, it’s none of my damn business. Which is why I was interested in Bernstein research analyst Jeffrey Lindsay’s answers to why publicly traded internet companies buying startups that don’t have business models is usually a dumb idea.
In an interview with paidcontent, Lindsay said that Google is an example of a company that gets a free pass when it comes to buying (YouTube) other companies that don’t have a business model, which is why he doesn’t think the search company should buy Twitter and others should stay away from social networks.
“The problem with Facebook, MySpace, and Twitter is that while they generate huge user interest, they haven’t been able to demonstrate the same ability to make money…At some point, Google’s Golden Goose is going to keel over from the load it’s carrying. I would argue that it would be better for Google and Yahoo to pass on these types of social- networking acquisitions until they have a clearly demonstrable business model.”
While I think he might be right about other social networks, look at AOL and Bebo, I think he underestimates Twitter’s ability at real-time search. Which is a function I use every day. But that’s why he gets paid the big bucks.
— Express you opinion, comment below.