The conference call disclosed that among "young teens" engagement -- daily active users -- is now falling.
I can tell you anecdotally that among late-age teens (e.g. 16, 17, 18 year olds) Facebook is no longer cool and while many of them are still on the system many are talking about where they're headed next, some are already heading there, and their "engagement" is dropping with many intending to leave entirely.
Simple -- the "in your face" ads and loss of the "cool" factor.
Worse, there is basically a no-growth in user count in the US as well; saturation has been reached as well.
There is utterly nothing that Facebook can do about this because the more they try to "monetize" (that is, spam you with ads) the worse the problem gets.
I said originally this company was a zero when it went public, and I stand by that despite the ridiculous ramp in stock price over the last three months. The current P/E is in the stratosphere; at GAAP 17 cents annualized the firm is trading at 73 times current earnings. That's implies a 73% forward earnings growth rate for this to be "reasonable", but with a stalled user base in the US and stable-to-decreasing engagement that is a pie in the sky dream and there is every reason to believe that some time in the next few quarters the firm will post up a negative growth rate at which point the stock will instantly collapse.
I reiterate: Facebook stock is ultimately a zero.
PS: After being up 15% on the earnings release it has now gone negative. Oops.
Adobe Systems Inc. is expected to announce today that hackers broke into its network and stole source code for an as-yet undetermined number of software titles, including its ColdFusion Web application platform, and possibly its Acrobat family of products. The company said hackers also accessed nearly three million customer credit card records, and stole login data for an undetermined number of Adobe user accounts.
The exact scope of this is not clear at all (no thanks to Adobe, which may not even know) but this is not good. And what's even prettier is that if they got into the systems and started "rooting around" it appears they may have been able to commit changes to Adobe's software.
Software that is then pushed out to people all over the web.
And not just any software either. ColdFusion (used all over the place for various web pages) and even worse, Acrobat, which is used to produce PDF documents, including those in senstive applications such as government, health care and more.
The company also said that allegedly-encrypted credit card numbers were grabbed, probably for people who are subscribers to Adobe's "Cloud Services" -- Creative Cloud.
The latter is very problematic. See, the systems in question have to be able to decrypt the credit cards to use them, which means the key(s) necessary to do so are also on the network somewhere.
There are two problems that come up immediately: (1) the hackers may have stolen the key as well, whether they know they have it (yet) or not and (2) they can now perform an offline attack on the credit card database and since credit card numbers both have a format that is known and a checksum that has to be good for the card number to be valid it is not difficult to know if you have the correct key to break the encryption. When you have an entire database full of credit card numbers it suddenly becomes very worthwhile to investigate whether the clown-car brigade that let you at the database also used crappy (and therefore breakable) encryption.
The obvious (and unanswered by Adobe) question is how did they get in? If in fact they broke in using flaws in the very products they now allegedly accessed...
Software hackers and break-ins are a fact of life. One of the problems that arises from this fact of life is the more trust you place in such institutions and software companies the more at-risk you are.
Still think it's a great idea to give the government all this health-related (and financially-related) data eh? Still think it will all be ok?
Second, this throws a whole bucket of cold water over the entire "cloud everything" model, which Adobe is desperately trying to force everyone into, as is Microsoft (with Office365.) This sucks folks, as you are trusting not only payment information but also all your data to that cloud provider and if they blow it your data gets stolen.
Still think this is all a good idea eh, and something you ought to use either personally or in your business?
That's what I thought.
... simply turn off all the things that you thought you were "getting" with it.
You have to love Apple fanbois. Here's the list:
You carry around a device that has to be crippled so it doesn't chew your battery to pieces, the manufacturer made it impossible for you to carry a spare in your pocket and swap it when necessary, and the answer to this isn't to tell that manufacturer to stuff their crap where the sun doesn't shine -- and go buy something that works properly?
You really are that dumb.
If you're not going to provide support you shouldn't get a margin for not only doing nothing but actively trying to lead the customer away -- or lie to them, both of which the carriers in the US have done repeatedly.
Now implement the first set that include:
Not only does BlackBerry have that edge now they have a very material pricing advantage as well among competitive brands that are not sold directly.
Too little, too late? Maybe. But as a private company, assuming that the job cuts get the cost structure under control and demand can be stimulated through differentiating the product -- maybe not.
For the privilege of using an Apple-certified cable and power adapter (sold separately, of course), iPhone users will pay an exorbitant and inexcusable $38, plus tax and shipping, just to charge their phones. (Multiple times, in fact, if they were users before and after the change to the Lightning dock connector, which rendered 30-pin dock connectors obsolete.)
Oh, and for those who thought they'd turn that******into only half-a***** and buy a third-party cable?
Apple "fixed" you in IOS7 (without warning you first) -- they turned all those third-party cables into worthless pieces of string with the IOS7 upgrade.
So if you have an iPhone 5 and bought a third-party charger cable to evade the AppleRapeJob, the company's one-way "software upgrade" just destroyed your investment.
This is the second time Apple has done this. The first time was with standard USB chargers. The standard way for a USB power source to indicate that it can put out more than 500ma (the standard for a port that is on a computer) is to short the data pins. This is easily read, of course, and since a charger is just a voltage source (5V, to be specific in this case) that's easy and requires no intelligence in the charger itself.
Apple, never satisfied to use what had been done by others, changed this for their chargers for the iPad and iPhone. They used a differential voltage scheme on the data pins instead of the already-established standard, which appears coldly calculated to screw you if you plug in a non-Apple product to those chargers made for Apple devices -- that device will only charge at 500ma since it doesn't see the expected short on the data pins. This became important with phones in cars being used for navigation because with the GPS and data up most of them draw more than 500ma -- as a result a standard 500ma charger -- or one built to be "nice" with Apple's devices -- will actually result in the phone losing charge when navigating!
That little game looked very intentional to me -- Apple could have simply used the existing standard. By not doing so they destroyed what was a cohesive market for in-car high-rate chargers.
But this is worse, because they're putting a chip in their "Lightning" cables which are proprietary to Apple. And without one you get the warning, or worse, the phone lies and doesn't charge at all (or does so at such a low rate that you'll believe the charger is broken.)
If you keep buying products from this company you are an iDiot!
PS: A high-quality, coiled-cord, full-2A+ car cord for the standard microUSB charging port on virtually everything else can be had for under $12. Name brand too, with a second USB port so if you want to charge or power two devices at once -- you can. I own two of them (one for each car) and they absolutely rock.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.
NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.
The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.
Looking for "The Best of Market Ticker"? Check out Ticker Classics.
Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.
The Market Ticker content may be reproduced or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media or for commercial use.
Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.