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Watch Out for Your Eyeballs!

Freaking Heck's picture




 

By: Chris at www.CapitalistExploits.at

I'm going to paraphrase a conversation I had recently with a Venture Capitalist whose focus is on the tech industry:

Me: "Eyeballs, that's what founders are telling me. How will this company monetize them?"

VC: "Don't know, they haven't figured that out yet."

Me: "Right. Then how do you come up with your current valuation?"

VC: "That's industry standard."

Me: "Industry standard?"

VC: "Yeah, it's based on what other companies are getting funded at presently."
Me: "Companies are being funded on eyeballs at the moment. So it's based on eyeballs?"

VC: "Yeah. Well, they're not there yet. It's projections of eyeballs."

Me: "Right, projections of eyeballs which they don't yet know how they'll monetize?"
VC: "I don't think they need to monetize them."

Me: "Really? How does the company make money for shareholders?"

VC: "Exit will be a trade sale."

Me: "Right. Who's going to buy them?"

This went on for a little while. I say a little while because I don't have time to waste on deals I'm not interested in.

No offense meant to my VC colleague. This is endemic right now. When you're a 20-something or maybe early thirties and haven't been through a business cycle, which is typically roughly 7 years, let alone a major secular cycle which is on average 26 years in length, then "eyeballs" seems like a perfectly valid way to value a business into the billions. This is how we can get an app valued at more than one of the fastest growing countries in the world right now.

This goes deeper than stupid ideas turned into stupid companies, run by stupid people selling equity to other stupid people, with the anticipation that even stupider companies, run by even stupider people, will buy out this stupid company. Following me?

The reason I say it goes deeper is because it's a reflection of how our world works now!

Technology has drastically changed how we interact with one another. Twenty years ago I couldn't operate as I do now. I am communicating with you, our lovely readers on a MacBook from a beach resort town in New Zealand. I've had conference calls throughout my day with people in Hong Kong, Beijing, Thailand, Los Angeles and New York. This is a normal day for me. My average day doesn't look distinctly different when I'm in Singapore or anywhere else. Information flows are now near seamless and instant.

At the same time there is a plethora of people fighting for my attention, and the only way I can function is to remain focused. I say this because I don't loathe or love technology. It is a tool, nothing more. This tool is unlike a shovel however, since a shovel can't direct you and use you. You control the shovel and use it for your purposes. Technology is different. If you're not careful you can be used by it or by those who are controlling it.

Remaining focused is how successful people become successful. Focus, determination, perseverance - this is a trait inherent in all the successful people I know. This, in today's world of incredible stimulation from every digital angle, is more challenging than ever.

There is a relentless drive to attract eyeballs since we are now overwhelmed with information from every angle, and for those who don't control this flow of information they simply don't know where to focus attention. Quality information struggles to find it's way into the headlines, as the newspapers have turned into porn outlets for eyeballs. They sell "news porn" now, with no real information to be gleaned. Tiny snippets of sensationalist soundbites flood the newswires.

It works. Let's take an egregious example or two shall we..? Pray tell I ask you what Paris Hilton has done for humanity? Why does she get any airtime? Or that Kardashian chic that has, as far as I can tell, become famous for f**king rappers. She's got to be one of the highest paid hookers in the world. I just Googled it, and according to one source she made $28 million last year. For what?

Paris Hilton, and numerous others like her, are completely outrageous. Intellectual dimwits who, as far as I can tell, are famous for being famous!

That's what people seem to want though. They can't keep from clicking on that link about Miley Cyrus groping Paris Hilton in front of her boyfriend. Yeah, I just found it online to prove my point. This garbage is front page news.

These are completely pointless people doing completely pointless things, but they have this figured out. They're the new kings in an age of instant short-term self-gratification. Every time Paris Hilton drops her knickers dollar bills pour out. It's like freaking alchemy!

Paris Hilton

Why? because she has eyeballs.

In an article from the Guardian newspaper I found the excerpt below.

In a world of instant gratification and where an alternative website is just a mouse click away website owners need to find ways to firstly grab the attention of a user, and then keep it for long enough to get your message across. If you don't, their cursor will be heading to the back button and on to a competitor in the blink of an eye.

Those who make the most outrageous statements, no matter how flawed their logic or how consistently wrong they may happen to be, acquire the limelight. It's increasingly a world where the idiots, the morons, the hacks, attract eyeballs and eyeballs are the new currency. Social media is where people receive their information now, but in order to get in front of you it's gotta be catchy, funny and short because remember that attention span is vanishingly thin.

This is why a YouTube video, no longer than 3 minutes in length of some stupid animated bear will receive millions of views, while a thoughtful, valuable presentation on TED about a revolutionary cure for spinal injuries receives a fraction of that.

Smarter phones and dumber people. You'll see families, groups of friends, husbands and wives, boyfriends and girlfriends going out to dinner together and they don't even bloody talk to each other. They're stuck to their phones or tablets right through dinner.

According to the National Center for Biotechnology Information, at the U.S. National Library of Medicine, the average attention span of a human being has dropped from 12 seconds in 2000 to 8 seconds in 2013. This is one second less than the attention span of a goldfish.

Here is the link to the entire article if you're interested. Shocking!

In the blogosphere fear sells better than common sense, so we find purveyors of "disaster porn" shouting out from the rooftops to beware of this, and beware of that. Not surprisingly they actually do very well. "News porn", "scare people shitless porn", "financial porn", "comedy porn".

The global advertising market hardly existed in the industrial age. It was a nascent industry. Today it's morphed into a beast of epic proportions, and we now live in a PR driven world.

Global advertising revenue

I'll keep the website and the posters name out of this, however I read a column yesterday which had a really outrageous heading to it... It made one think that the world was coming to an end, and when I read through the post I realised very quickly that the authors knowledge of the facts at hand (he was attempting to discuss a move in the forex markets) were flaky at best. What was being said was so unbelievably normal for anyone that knew even the first thing about economics or financial markets that it would not even have made up more than a minutes conversation with any intelligent person versed in the topic. That didn't stop this guy however, and he'll likely be able to garner more eyeballs selling fear, apocalypse and BS.

The Math

Here is the math as I see it, and it's no different than it was before we had the Internet, smart phones, or even print media way back.

Eyeballs can be monetized. Number of Eyeballs x Conversions = Clients and Clients x Goods Sold = Revenues. Revenues - Opex = Profit.

In this entire equation the most difficult thing to do is to get the eyeballs.

The winners in this game will, as always, be those who are able to focus, because those who are constantly distracted will simply be the product. You and your eyeballs are the target. Use them wisely.

- Chris

 

"The average TV commercial of sixty seconds has one hundred and twenty half-second clips in it, or one-third of a second. We bombard people with sensation. That substitutes for thinking." - Ray Bradbury

 

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Tue, 12/16/2014 - 13:52 | 5559059 steveo77
steveo77's picture

Paraphrase the article….Eyeball this Smiling Yamashita asshat

Asahi Quotes NRA Chief "The Only Responsible Thing is to Dump the Radiation Into the Ocean"

Satirical recap[ of the situation by Nukepro website

http://nukeprofessional.blogspot.com/2014/12/paraphrase-article.html

We never had a real plan, so we decided to act like we were doing something partly useful, and we built a bunch of tank, except that they were shitty tanks, only intended for a 1 year use and constructed by less than "craigslist" level workers, mostly alcoholics and those marginalized citizens in debt to Yakuza who were forced to work at the plant without proper training or tools.

Then of course, we forgot and pipes and pumps freeze in winter, especially the ones we didnt insulate, so that caused trouble. Of course the water filtration system for the initial batch of radionuclides broke several times and a few times the worker themselves were sprayed with radiation because they didn't understand how to operate the valves. The the ALPS system, meant to take out the strontium, was years late and then hardly worked. But thats OK because we were instructed by the nice economic hitmen from USA cartel to just ignore the strontium. Actually one was an economic hitwoman, Hillary Clinton, who assured us that USA was jack up their allowable levels in food adn buy all of stuff without testing any of it…as long as we followed their corporate interest and rolled out the BP game plan………

Tue, 12/16/2014 - 11:47 | 5558430 Panic Mode
Panic Mode's picture

Did she go commando?

Tue, 12/16/2014 - 11:15 | 5558296 RaceToTheBottom
RaceToTheBottom's picture

The only part missing from this article is the author recognising that he is not any different from fat Ass KK.

They both produce the exact same amount of value.

Tue, 12/16/2014 - 10:31 | 5558050 I am a Man I am...
I am a Man I am Forty's picture

This is what FB did, get a bunch of eyeballs and started out with no ads, now they have all sorts of advertisements.  This is nothing new and not at all surprising.

Tue, 12/16/2014 - 10:25 | 5558016 GeezerGeek
GeezerGeek's picture

The author indicates that he can do online stuff, whatever it is he does online, equally easily from a beach in New Zealand or Singapore. Why doesn't he just do it all from his mother's basement, or wherever it is that he hangs his hat? If I were on the beach in New Zealand, I'd leave the electronics home and enjoy the natural world around me. (FWIW, I live within 2 miles of the Atlantic Ocean and see it maybe one or twice a year as I drive by on A1A.)

Overall, I was reminded first of the movie Idiocracy and second of the recent ZH article about the cultural implosion in the US. Apparently thinking is too hard for most Americans, as is being informed by the world in general. It would be interesting to see what would happen should a massive CME wipe out electronics worldwide for a week or two.

Tue, 12/16/2014 - 15:05 | 5559420 nofluer
nofluer's picture

Idiocracy is one of my favorite movies!!! Got one of my kids a "Brondo" T-shirt for their birthday.

As to a CME wiping out electronics for a week or two - highly unlikely as a CME that was capable of wiping them out would also probably be capable of wiping out most of the North American grid via taking down (frying) sub-station transformers - and the grid would be down for (current estimates) at least ten years.

Tue, 12/16/2014 - 08:13 | 5557388 fredquimby
fredquimby's picture

"This is why a YouTube video, no longer than 3 minutes in length of some stupid animated bear"

You are kidding?! This animated bear movie was probably one of the best movies ever made! haha

www.youtube.com/watch?v=PTUY16CkS-k

....and it's now had 5.5 million views, mostly by American's without a clue, probably, so it has most likely done an amazing job educating a few sheeples. More than a spinal injury film would do anyhow!

Tue, 12/16/2014 - 03:46 | 5557053 Boxed Merlot
Boxed Merlot's picture

..."he'll likely be able to garner more eyeballs selling fear, apocalypse and BS"...

 

Please don't tell me that's why ABC owns ZH. (Copyright ©2009-2014 ZeroHedge.com/ABC Media, LTD; All Rights Reserved.)

 

Can't they make enough frns selling tickets to the Matterhorn Bobsled ride or Space Mountain?  I haven't been there for a while, but doesn't Mr. Toad's wild ride make enough money to keep them in business?

 

 

On the bright side, at least one sovereign has seen fit to increase interest rates on their currency to something closer to a true market reality, (which may actually in retrospect be seen as being far too little far too late) as to prevent full cardiac arrest.  After 7 years of zirp / nirp, Ben and Janet's nutty solution: ( http://www.benjerry.com/flavors/new-york-super-fudge-chunk-ice-cream ) has over 17trillion frns floating around the globe in search of more arteries to clog and lives to destroy.  Forget the supersized big gulps Bloomberg, why don't you try reporting on the true threats to the health of US citizens?

jmo.      

Tue, 12/16/2014 - 10:43 | 5558123 MontgomeryScott
MontgomeryScott's picture

Please don't tell me that's why ABC owns ZH.

ABC Media, LIMITED. That would NOT be the American Broadcasting Corporation.

I found ONE example of 'ABC MEDIA, LIMITED': http://www.rmimedia.co/about.html

People eat what they want, and think what they want (as long as they THINK they're thinking and eating what they've been told is 'their idea').

 

Sat, 12/20/2014 - 05:01 | 5574989 Boxed Merlot
Boxed Merlot's picture

People eat what they want, and think what they want (as long as they THINK they're thinking and eating what they've been told is 'their idea')...

 

 

OK, so there's this company, ( © abc media, a RMI company. ) that's peddling their wares with the knowledge their name is likely to be confused with a rather large, multi-national entity thereby assuring themselves with the likelihood of riding the coat tails of said company. 

Stupid me.  Unfortunately, I'm still no better off knowing if said folks are genuinely interested in promoting truth or garnering eyeballs.

 

For some silly reason, I find myself pining for the days of a non US / IRS enfused Swiss banking apparatus that could actually be counted on as being "sovereign".

 


 

 

 

Tue, 12/16/2014 - 11:38 | 5558410 Mi Naem
Mi Naem's picture

Yeah, kinda gettin' tired of this. 

It does help explain the viral nature of baseless conspiracies. 

 

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