Douglas Rushkoff called the impending doom of AOL when it’s hapless merger with Time Warner was announced. Now he says Facebook is cashing out and it’s the beginning of its demise, in an opinion piece at CNN:
All signs for Facebook appear to be pointing up.
Mark Zuckerberg is Time’s Man of the Year, the movie about him seems likely to be an Oscar winner, and now Goldman Sachs is raising $1.5 billion from its favorite investors on behalf of the social networking company.
At the very same moment, Facebook’s only real competitor –NewsCorps’ waning social networking site, MySpace — is shedding employees and expenses, most likely in hopes of a fire sale.
But appearances can be deceiving. In fact, as I read the situation, we are witnessing the beginning of the end of Facebook. These aren’t the symptoms of a company that is winning, but one that is cashing out.
Indeed, 11 years ago this week, when AOL announced its $350 billion merger with Time Warner, I was asked to write an OpEd for the New York Times explaining what the deal between old and new media companies really meant. I said that AOL was cashing in its over-valued dotcom stock in order to purchase a stake in a “real” media company with movie studios, theme parks and even cable. In short, the deal meant AOL knew their reign was over.
The Times didn’t run the piece. Of course, the merger turned out to be a disaster: AOL’s revenue stream was reduced to a trickle as net users ventured out onto the Web directly…
[continues at at CNN]