Unless you’ve been living under a rock, the technology sector has been blasted with disappointing news all week. For instance, Facebook shares continues to fall since its initial IPO, Groupon’s investors have announced they have given-up on the company, and Dell’s revenue numbers are far below the projected numbers expected on Wall Street. A debate has emerged among the media about whether the failure of these companies means this is another tech bubble about to burst, or if the recent struggles are simply not indicative to the health of the market.
In the case of Facebook, Mashable asks a hypothetical question as to what would happen if Zuckerberg were to step down. For somebody who is a 28 year-old multi-billionaire and just had the largest IPO on the history of Wall Street this is a crazy thought! However, the article states that this would enable Facebook to implement a more experienced CEO, and it would inject fresh ideas to further its growth. Additionally, it lays out three examples from Larry Page at Google, Steve Jobs at Apple and Bill Gates at Microsoft, who all walked away from their companies eventually to pursue other interests. Is this the inevitable answer to Facebook’s success?
The resuscitation of Groupon is a bit more troubling. GigaOM writes that the business model didn’t even lend itself to be a tech company in the first place, and their top saleswoman actually quit! However bleak the future looks for the company, the silver lining is that it did beat its second quarter estimates, and it claims to have built a new revenue stream. Groupon ‘s new segment called Groupon Goods is the company’s way to sells items like earrings and yogurt which it gets directly from manufacturers, and they book the revenue for the entire price of the item. The Associated Press writes that analysts believe Groupon can still succeed, and they expect the company to meet the expected $605.5 million revenue mark for the next quarter.
In the case of Dell, it’s no secret that they are continuing to move away from the PC market, so what direction will they take to recoup the lost revenue from the PC? The New York Times Bits blog says the company wants to sell enterprise-level cloud technologies, and they have former HP executive Marius Haas leading the way. Additionally, the article mentions with Dell’s acquisitions of Quest Software in July, it expands Dell’s footprint in the datacenter and opens the door to selling more servers.
I am not a prognosticator of the financial markets, but as tech public relations professional, we are able to work with start-up and veteran tech companies every day. From our side it seems there are an endless number of tech organizations on the cusp of greatness, and while the success of these aforementioned companies certainly helps, I believe the market is more stable than we think.
What is your take on the future of the technology market?
*** Picture from Invest2Success blog