Selling something vs nothing is a good metric to think about, but "advertising" is certainly not nothing. In fact, it's a multi-billion $ industry. It just so happens to be dominated by Google and FB currently, who are both "fundamentally" selling something real.
I think one could've argued at the time that Apple wasn't worth something because they were the struggling vertically integrated supplier of consumer based computers in a sea of horizontally integrated providers. It wasn't until they got more of a foothold everybody started seeing the benefits of software made to run on a single type of device.
Intermediaries have increasingly become devalued over time as digitization has meant there's less and less of a need for middle-men. Hence why Amazon's surge has come on the heels of providing Entertainment and Cloud services, something intermediaries in their space never did before.
Facebook yeah I suppose, the fact that they have margins almost no other company could dream of kind of rationalizes it to a strong degree though. All in all, I see where you're coming from.
Nike yes I see where you're coming from.
Disclaimer me posting that comment wasn't suppose to be a riot act that Snap's going to be the next $400+ billion dollar company, I'm as skeptical as most about the future prospects. However, I'd argue against saying they produce nothing. The fact that they are anti to the leading social media provider (of sorts) gives them a production point. As demonstrated in their reports, their user's incessant check in's on the app despite any Facebook-esque notification stream to keep them coming back is pretty envious (in my opinion).
Whoever that "someone" is, probably isn't as experienced in the markets as you think.
The concepts don't translate, that's for sure. However, to claim that Facebook is worth something if they just keep collecting data and we see nothing being done with that, is just wishful thinking.
Amazon invests in research and built a PaaS/SaaS service that's worth a lot. It innovates on several products like Kindle and Echo. Owns patents that are worth something.
What's the ACTUAL commercial value that Facebook is bringing to the world and to people that's making it so worthwhile? Sharing pics? Getting customized newsfeeds? Having yet another channel to communicate with your aunt or with that customer service? What do we lose if Facebook goes away tomorrow?
It's the model that has worked for TV, Radio, and Newspapers but in the new world the integration points are different from those old models making the chain of value much different.
Here's a short article that'll help explain it better than I can: https://stratechery.com/2015/aggregation-theory/
By your friend's logic, AirBnB doesn't have any value either.
Yes AirBnB is a glorified hotel reservation site, but isn't a car just a glorified horse and buggy? I guess I just don't understand how you could be so dismissive in the face of something so clearly valuable and so clearly wanted by the market.
- Apple was a company that sold computers. SJ being kicked was an relevant event for the company, but it still sold computers and was worth something.
- Amazon was an intermediary between sellers and buyers. Today is a company that invested a lot in other things and is worth something.
- Facebook could be monetizing something, but it's still just a webpage. Remains to be seen if it's worth something, so their shares are crap (this is from a fundamental point of view, regardless of whether they keep rising)
- Nike sells shoes. It's worth something, though it's not a fundamental company for the market.
SNAP, on the other hand, has some face recognition algorithms, and created a free app. That's it. It produces nothing. It's a worthless company when it comes down to the assets it has and the product it sells.