Gowalla has had a good run in the location-based check-in market, taking on Foursquare before getting lapped by its New York rival. Now, the company is confirming a report that it is moving to Facebook, which will use the Austin-based company to bolster its new Timeline feature.
The deal spells the end for Gowalla, which will close up shop in January just like many other Facebook acquisitions and relocate to Silicon Valley. Grabbing Gowalla gives Facebook a good team that has recently shifted from gamified check-ins to social city guides that users can contribute to with their own pictures, highlights and lists. Earlier, the company announced it would end the collection of virtual items, part of what I called an evolution in location-based services away from games toward more business opportunities.
Here’s the statement from Facebook:
We’re excited to confirm that Gowalla co-founders Josh Williams and Scott Raymond, along with other members of the Gowalla team, are moving to Facebook in January to join our design and engineering teams. In talking with the Gowalla team, we realized that we share many of the same goals: building great products that reach millions of people, making a big impact quickly, and creating new ways for people to connect and share what’s going on in their lives. While Facebook isn’t acquiring the Gowalla service or technology, we’re sure that the inspiration behind Gowalla will make its way into Facebook over time.
In a blog post, Williams said he was blown away by the things he saw at Facebook’s f8 conference and a few weeks later, Facebook called. He said it makes sense to combine forces and make the biggest impact together. Wrote Williams:
Three years ago Gowalla’s journey began when I took a photograph of Lake Tahoe on my iPhone. I had just finished a phone call with my dad, and I wanted nothing more than to share that photo and place with him. Not just in a text message or status update sort of way, but with a bit of weight that said “I wish you were here” and “this moment and place are meaningful to me.”
We created Gowalla to inspire people to go out and share those places, photos and stories. The past three years have been quite the journey, oft-times in a very literal sense!
The Gowalla Passport has become a record of all the places we’ve visited, the people we were with, the photos we took, and the stories we told. Many of you even use Gowalla like a scrapbook of sorts — a place to keep all those memories.
…We know how much many of you loved Gowalla. It’s been the highlight of our lives as we’ve built it with your help over the past two years. As we move forward, we hope some of the inspiration behind Gowalla — a fun and beautiful way to share your journey on the go — will live on at Facebook.
The sale of Gowalla also shows that the location-based market is still in flux, and it’s still not quite clear how everyone is going to make money here. Gowalla launched in 2009 but struggled to compete against Foursquare, which surged past 10 million users this past summer, far outpacing the 2 million users Gowalla had. But Foursquare is also still working out its business model. There is a big opportunity in helping connect merchants with mobile users, delivering targeted ads and offers to them and serving as an alternative to printed coupons and traditional Yellow Pages. But it’s unclear how many competitors can make a go of this and pull in enough money to thrive. Gowalla had previously raised $10 million from the Founders Fund, Shasta Ventures, Greylock Partners and other investors.
Facebook has a history of making so-called acq-hires, buying up startups primarily for their talent, not their products. Gowalla is well regarded for its design chops and could certainly help Facebook as it rolls out Timeline, its personal history feature. That could help Facebook compete with a resurgent Path, which just put out a new version of its app designed as a smart journal for users. Gowalla could also help Facebook refine its location-strategy. Facebook has pulled back on check-ins and has instead opted to allow people to tag their locations in status updates. Also, Gowalla could help with improving Facebook’s mobile product, which could use a boost especially as more mobile-focused competitors emerge.
I liked Gowalla and thought it was a good-looking service. But it didn’t seem to capture people’s attention in the way Foursquare did. Even one of its defining features, virtual items, was ultimately a “distraction” for many users, the company said. The move to become a city guide came late and I noted earlier that it wasn’t clear if it was designed for locals or tourists. Facebook has picked up a smart team with good ideas and it’s going to need them all if it wants to stay at the head of a social market that is increasingly about mobile and location.
Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.
- The future of mobile: a segment analysis by GigaOM Pro
- Shopping Matters When it Comes to Location-Based Apps
- The Near-Term Evolution of Social Commerce
A few weeks ago, SocGen's Dylan Grice released a piece which quickly became a scathing focal point in the inflation-deflation debate, in that he speculated that it was not the Weimar-unleashed hyperinflation (which incidentally is the primary reason why most Germany now dread what the outcome of a profligate ECB would look like) that led to the surge of the Nazi party, but in fact the opposite: the stinginess of German monetary authorities in the 1930s that further exacerbated the situation and helped unleash the Hitler juggernaut. Many promptly took sides in the argument, the bulk of which were shocked that Grice - traditionally a defender of prudent monetary and fiscal policy, would go so far as suggest that it is the ECB's duty to print or else it may justify another "Hitler"-type advent. Well it seems there was more than meets the eye, and in a follow up piece the strategist says: "The purpose of the historical analysis, therefore, was not to reach conclusions about how adherence to hard money principles will linearly lead to resurgent fascism, or war on a par with that seen in the 1930s. Neither was it in any way a defence of Keynesian fiscal activism. It was to illustrate that adherence to even the best principles must come at a price, making a judgment on whether or not that price is prohibitive or not is unavoidable, and today Germany and the ECB have to make that judgment." And his conclusion: "From the beginning of this crisis I've believed the only way politicians will get ahead of it is to bring in the ECB. Since I believe politicians do want to get ahead of it, I expect the ECB to print, and print copiously. I've repeatedly emphasized that printing will solve nothing, beyond buying market confidence for a while... All ECB printing will do is buy the politicians time and space to reset government and private sector balance sheets, to reform how their economies function and be honest with their own citizens. Whether they use that time or not is a separate question (frankly, I'm not hopeful)." But instead of us putting words in Grice's mouth, here is the explanation straight from the horse's mouth. Incidentally we agree 100% with Grice on the issue that eventual printing is inevitable. Which for the TLDR crowd means the entire Grice missive can be summarized as follows: 'buy gold.'
From Dylan Grice:
My point was that there is always a price. Today, the price of Germany and the ECB holding on to their hard money principles is a possible break-up of the single currency. But both have signalled that they won't pay that price ("if the euro fails, Europe fails"). So my conclusion was that since Germany's stance is logically inconsistent (it wants to hold onto its principles but it doesn't want to pay the price), it will ultimately be forced to choose. My prediction was that it will sacrifice its principles. The three broad criticisms I got from readers were:
- My history was factually wrong
- My analysis was simplistic
- In suddenly urging the ECB to print, I was a hypocrite
Let's go through each one in turn.
Complaint #1: Grice’s history is disgraceful and wrong
One common response to my thesis was that "fear of inflation" had nothing to do with Germany's decision not to devalue. In fact, the key factor was the foreign debt Germany owed to the Allies. A number of you replied with this criticism, but the following was my favourite.
“Just read Dylan Grice's case that Reichsbank's hard currency policy helped the Nazis to power in 1933. I am amazed that SG would allow such Germanophobic historical crap to be published under its name. Unbeknownst to your strategist, the Allies set Germany's monetary policy back then. His paper is a disgrace.”
Irate Reader 1
Fanmail, eh?! To be fair to Irate Reader 1, foreign debt was an issue. According to Adam Tooze [See "Wages of Destruction: the Making and Breaking of the Nazi Economy" by Adam Tooze], then American President Herbert Hoover was leaning very heavily on Germany not to devalue because he was concerned about the value of American loans to Germany. But to say the Allies were setting German policy is quite an exaggeration. According to Tooze, the UK was very keen on Germany following its policy of devalution, while the French were offering them cheap refinancing credit. Keeping America onside was deemed by Germany - rightly or wrongly - to be in Germany's best interests.
Of course, the logic that said Germany couldn't devalue because devaluation would merely lead to an increase in the real debt burden is flawed, because the alternative policy of deflation also leads to an increase in the real debt burden (because the debt was denominated in gold). What Germany needed then, as various countries in the eurozone need today, was to default, plain and simple. So if Irate Reader 1 and those who made the same point are correct, the parallel with today is ironically even more acute. Then it was the US forcing an overindebted country into depression rather than allowing it to default; today
Germany is doing the same thing.
But as it happens, it's just not correct to claim that fear of inflation had nothing to do with Germany's decision to deflate rather than devalue. According to a speech given by then Reichbank president Hans Luther in September 1931:
“People point to the fact that inflationist countries receive a premium on exports as their costs have not adapted themselves to the depreciation of their currency. All that is true in itself: we have, indeed, experienced it ourselves. But have we not also experienced what follows? Have we quite forgotten that this advantage is only present in the first stage of inflation, and that as soon as costs and prices catch up the premium on exports vanishes … Then there would certainly be a demand to create a new “first stage” and so on. For this reason there is no question for us of a carefully controlled dose of inflation.”
At the same event, then-Chancellor Bruning said:
“Conditions in Germany, however, are very different from those in Britain. No people that has had to endure, as Germany has, the ghastly experience of such inflation, can tolerate a fresh blow, in times of the greatest uncertainty and fear, to confidence in the future of their savings.” [The Economist, Oct 3rd 1931, page 613 for both speeches]
If that's not fear of inflation driving a deflationary policy, I'm not sure what is. As for the charge that my observations were Germanophobic ? I think that implies that I'm blaming Germany for their depression, or even for what followed. But I wasn't (and I don't as it happens). I'm not interested in blaming anyone for what happened. Sometimes things just happen. I am just trying to understand why and how.
Complaint #2: Grice’s history is simplistic
Another common complaint was that I wasn't doing justice to an historical event with complex causes. One client wrote:
“Although a nice story it is more a fairy tale. Society/human nature/markets/economies are too complex to go back and say what would have happened. It’s futile anyway; you can’t do anything about the past but learn from it. And Dylan doesn’t.”
Dismissive reader
But I thought it was best summarized by a reader's comment on the write-up of my original piece on the FT's excellent Alphaville site:
“This is hideous historicism and statistical manipulation leading to grand and sweeping conclusions. This is the worst sort of shamanism!”
Shamanism?! I actually looked up shamanism in the dictionary and found it had something to do with the American-Indian religion. I think he meant charlatanism. Anyway, these readers were frustrated that my treatment did not do justice to a highly complex phenomenon. Why was I so sure unemployment was the decisive factor behind the Nazi rise, as suggested in the chart below?
If professional historians who have devoted their entire careers to the study of Hitler's rise to power cannot agree, how can a four-page investment strategy report? And anyway I wasn't attempting to provide the definitive answer. The fact is we don't know and we probably won't ever know, because we can't ever know what the single major cause was, or even if there was a single major cause. That's why I wrote.
“… how different might history have been if the Germans had inflated their economy when the crisis broke? It’s impossible to say.”
But what seems obvious to me is that the misery caused by yet another German economic crisis combined with uniquely German circumstances (e.g. the humiliation at Versailles, a 15 year decline in living standards, a calling into question of the liberal economic doctrine of boundless growth) drove demand for a new belief system capable of explaining the world around them.
So I find it highly implausible to say that the depression - which I proxied with the unemployment rate - had nothing to do with that demand, and that it was merely coincidental to political radicalism. If we accept that the depression was one factor, it follows that anything weakening the intensity of that depression would have lowered the probability of the Nazis gaining power. And if we accept that an inflationary policy would have mitigated the intensity of the depression, the thought experiment and any logical conclusions derived from it seem perfectly valid to me.
Complaint #3: Grice is a hypocrite calling on the ECB to print
This was actually a slightly puzzling one for me, as I thought I'd made my position clear. But I couldn't have been because quite a few of you raised the same objection. As (another) irate client wrote:
“Your hypocrisy is astounding. After preaching about the evils of money printing, you now join in with the chorus, squealing for the ECB to ride to your rescue by bailing out your bankrupt employer!”
Irate Reader 2
Or another good one from the Alphaville readers' comments
“I find it quite entertaining how so many people who have been blustering and soap-boxing about the importance of hard money and criticizing money printing, quickly ‘go soft’ when their policies are actually in danger of being enacted. Grice being a case in point.”
This is not what I said. I argued only that Germany's principled stance exacerbated its depression and served the Hitlerite cause. If we all agree that serving the Hitlerite cause was a bad thing, then we presumably also agree that a willingness to compromise its principles would have been a better thing.
I found this not only interesting, but challenging too, because the corollary is that there is no such thing as an unbendable principle. This might be an uncomfortable observation, but that doesn't make it false. If a principle is unbendable it ceases to be a principle. It instead becomes a rule. And I agree with Doug Bader, the British WW2 fighter pilot, who said “rules are for the obedience of fools and the guidance of wise men.”
The purpose of the historical analysis, therefore, was not to reach conclusions about how adherence to hard money principles will linearly lead to resurgent fascism, or war on a par with that seen in the 1930s. Neither was it in any way a defence of Keynesian fiscal activism. It was to illustrate that adherence to even the best principles must come at a price, making a judgment on whether or not that price is prohibitive or not is unavoidable, and today Germany and the ECB have to make that judgment.
I categorically did not recommend that the ECB or Germany go down the printing path. What I actually wrote on page 4 was this.
“ … whether or not Germany wants to do that is its decision. To be clear, I’m not recommending any particular course of action and offer no comment on what I think they should do. I’m only trying to understand what I think will happen … it is entirely rational for them not to sanction an ECB funding of a bail-out … if they’re so fearful of the dangers of playing fast and loose with the credit system. I don’t blame them for that at all. Central banks’ over-willingness to play such games in recent decades has been instrumental in creating the overleveraged world we live in today.”
As a general principle, I don't make policy prescriptions. I don't believe my view on what should be done is particularly relevant to investors. The world is full of opinions about how the world should work, and how it should be run. Does it really need another one? I don't think it does, but to bend a principle (!) for the sake of clarity, here's what I think should happen. I think the ECB shouldn't get involved. I think it shouldn't sanction any ECB funding of the ESFS either. I think it should tell governments who made this mess that they can fix it. It should say, "If you want a central bank that prints money when things get tough go and launch your own currency using your own central bank and print until your hearts are content."
But then, I'm not emotionally attached to the euro, or Germany's popularity in Europe. And I think the ECB and Germany's politicians are. Nor is this a new idea on these pages. It is a position we've taken since the crisis broke. On 27 May 2010, after the very attempt to ring-fence the peripheral eurozone economies, I wrote a piece called "Print baby print" in which I said the following:
“Today, the ECB is buying insolvent eurozone government debt which it is promising to sterilise. Yet they face the same stark calculus faced by their Anglo-Saxon cousins in 2008. You can only worry about the economy's ‘price stability’ if the economy hasn't already melted down! So here's my prediction: they won't sterilize, and the [QE] program will expand.” [See "Print baby print -? emerging value and the quest to buy inflation" Popular Delusions, 27/05/2010]
From the beginning of this crisis I've believed the only way politicians will get ahead of it is to bring in the ECB. Since I believe politicians do want to get ahead of it, I expect the ECB to print, and print copiously.
I've repeatedly emphasized that printing will solve nothing, beyond buying market confidence for a while. Ultimately, I believe the eurozone's structural problem is its government-heavy, over-regulated, anti-entrepreneurial welfare model which I believe is broken. In client discussions I've drawn the parallel between today's uncompetitive eurozone, with the unrealistic social promises it has made to future generations, and Detroit. All ECB printing will do is buy the politicians time and space to reset government and private sector balance sheets, to reform how their economies function and be honest with their own citizens. Whether they use that time or not is a separate question (frankly, I'm not hopeful).
http://cssa.mit.edu/forum/index.php?showuser=45958
http://www.ncv.unsw.edu.au/index.php/member/18835/
http://www.knopm.uw.edu.pl/forum/index.php?action=profile;u=37409
http://www.u.arizona.edu/~phlee/xenonapp/forums5/xenon/profile.php?action=get&id=7208
http://music.unt.edu/pianoresearch/discussion/profile.php?action=get&id=16272
http://sweb.uky.edu/StudentOrgs/Badminton/bbs/profile.php?action=get&id=8681
http://avidbbs.cuc.edu.cn/profile.php?id=1721
http://www.uta.edu/studentorgs/cgsa/forum/profile.php?id=33272
http://ftp.itcs.tsinghua.edu.cn/papakons/teaching/advalgorithmsS11/forum/member.php?action=profile&uid=68662
http://getreal.ous.edu/forum/member.php?action=profile&uid=36957
http://forum.loni.ucla.edu/member.php?u=10198
http://forum.portal.edu.ro/index.php?showuser=386978
http://www.jiexiu.gov.cn/user/profile/20442.page
http://forums.saa.edu/profile.php?id=263561
http://yakko.cs.wmich.edu/~digiband/index.php?section=showuser&subsection=lancemara
http://www.sas.edu.pk/vb/member.php?u=32029
http://www.sti.edu.vn/members/lancemara.html
http://forum.thcsnguyenbinhkhiem.edu.vn/member.php?u=5454
http://rkjsw.sh.gov.cn/user/profile/87172.page
http://portal.aerocivil.gov.co/foro/user/profile/25230.page
http://www.fjit.gov.cn/bbs/user/profile/173385.page
http://school41.edu.ru/smf/index.php?action=profile;u=9962
http://www.scribd.com/doc/75882708/Appliance-Repair-Services
http://www.docstoc.com/docs/108712775/Appliance_Repair_Services
http://www.slideshare.net/henryjohn34/appliance-repair-services
http://member.thinkfree.com/myoffice/show.se?f=d90342b9c507ddcc38f0d41fde4ffb82
http://www.divshare.com/download/16396780-375
http://www.4shared.com/document/0X9KkdQJ/Appliance_Repair_Services.html
https://share.zoho.com/preview/writer/685465000000083014/appliance_repair_services
http://www.box.com/s/e5ms3a5duhvte9n4zqig
http://issuu.com/henryjohn34/docs/appliance_repair_services
http://www.calameo.com/books/0004699018b34a74b13b0
http://www.keepandshare.com/doc/3361132/appliance-repair-services-doc-december-16-2011-10-50-pm-54k
http://www.wepapers.com/Papers/170344/Appliance_Repair_Services
http://www.gigasize.com/get/s485m5vogkd
http://www.doxtop.com/browse/96533712/appliance-repair-services.aspx
http://www.mediafire.com/?ciyw4482dy3atym
http://www.ziddu.com/download/17839907/Appliance_Repair_Services.doc.html
http://dl.dropbox.com/u/36250372/Appliance_Repair_Services.doc
http://speedy.sh/ChBFG/Appliance-Repair-Services.doc
http://mesendfiles.info/files/gnNd1324054830.html
http://www.largedocument.com/4/5d2c0f69/Appliance_Repair_Services.doc
http://uploadingit.com/file/ylcrcv2z7ucstwx7/Appliance_Repair_Services.doc
https://docs.google.com/document/d/1Kb1Go8YnHCzaOfSEaWqAeMYnX8h96pKUORofpujcsvQ/edit
http://www.myplick.com/view/6jNtKqnkbS8/Appliance-Repair-Services
http://www.viewdocsonline.com/document/sgzpdj
http://www.crocko.com/6B8A3E8E69FE448B90DB88104BD7FF9F/Appliance_Repair_Services.doc
No comments:
Post a Comment