Facebook, Whatsapp and Bubblicious Thinking

Many would argue that the deal is similarly strategically critical to , and that the company had to move quickly and aggressively or risk losing an asset that will be crucial to its growth and success in currently underserved markets. That’s certainly the line the company is taking in justifying the cost of the deal, and it will be several years before the full import and value of ’s investment can be sorted out. But the fact that the company bet a massive amount of resources on where it believes the market is going simply can’t be denied or even particularly well defended. Those who have tried to justify the deal are mostly in the same social technology promotional camp as .

That doesn’t necessarily make them wrong so much as biased in favor of their own beliefs—a common enough situation when it comes to people, particularly true believers. But it also suggests that rather than representing a cross-cultural phenomenon like the and housing bubbles that affected investors of every stripe, social media mania (at least so far as the Whatsapp deal goes) reflects the beliefs, or perhaps delusions, of a much smaller though still influential maddened crowd. It will take time to determine whether Facebook and its supporters inhabit a of their own devise. But at this point at least, it seems unlikely to inflate or explode the larger market.

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NOTE: This column was originally published in the Review.

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