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The Almighty Buck

Australian 'Net God' Refuses to Profit From IPO 81

Lansdowne writes "Robert Elz, a 'mildly eccentric' programmer in the CS department of Melbourne University and the administrator of the .au domain, refused to take part in last week's A$93 million IPO of Melbourne IT, the university's commercial arm. He has been quoted as saying that administrators should not financially benefit from registering domain names. Melbourne IT registers .com.au names as the Australian equivalent of NSI. Read the Sydney Morning Herald's story for the scoop. "
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Australian 'Net God' Refuses to Profit From IPO

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  • Yes. You could.
    And then you would have to put up with the .com, .net, and .org shared registry system and all the legal bullshit that goes along with it.

    Read: NSI and it's 'competitors' have no say over .au domains. Period.

  • Umm... they aren't being 'sold to the public' for hundreds of millions, they are being sold *by the public* *to the public* for millions of dollars.

    ie: The VA IPO was at $30 or so. That was the money VA made. All the rest, trading at $250 and such, was *NOT* seen by VA, and they had no part in it.
  • Actually, if you have a good look at how modern financial transactions & economics works.... You would find that the money does *not* exist and is mostly fictitious.

    One problem with the stock market, see.... let me throw an example.

    1) Union workers have an investment plan through their union. (i'm being very generic here, not picking on any group in particular).
    2) Big union investor types go out and find things to invest in
    3) Big union types invest in other big companies with union workers.
    4) Workers demand that their stocks get a good ROI.
    5) Big investor types working for union put the pressure on other big copmany to make it's stock go up.
    6) other company, of course, has union members in the same boat.
    7) Company starts to 'downsize' and 'lay off' worker to 'increase' efficientcy.. in order to drive the stock price and profits UP.

    So.. in the end, peoples greed for a 'better' return on investment caused them to get laid off in the first place.
  • Oh good, I'm getting a lesson in integrity from a guy who trolls from the comfort of anonymity.


  • This guy is just stupid. Stupid is as stupid does.
  • Guys, from what I've seen of JWZ's work (okay, maybe it's not his fault, etc...), I give the guy exactly nil-10 coding cred. Netscape's browser, like Mosaic before it and Mozilla today, is a pile of buggy crap.

    I don't know where he walked into the picture, but I've yet to see anything with his name on it that I would be sad to do without.

  • >> This guy is just stupid.
    >> Stupid is as stupid does.

    Yeah, right ... if only some of the people posting were as "stupid" as Robert Elz.

    A lot of very smart people left M.U. CompSci and made lots of money, often with the help of the university, and many of them would have loved to have R.E. join them - but if he's not interested, he's not interested.

    Allow other people to have their value systems, and be happy they don't tell you that you can't have yours.

    Tim (Melb.Uni. '87)
  • I've been thinking a lot over the last couple of years about the "Internet boom" in stock prices - wondering when it will end, etc.

    I have a bit of a theory that Internet companies like Amazon.com (not talking about VA Linux) will become the norm in the next few years, and people will expect Price/Earnings ratios of a few hundred (or whatever Amazon's is) instead of the tens we see for non internet companies at the moment.

    I think that the advantage of the Internet is that it allows very low margin businesses to survive by relying on a large volume of transactions. This leads to very low profits, but domination of the market, which is growing - and will be for quite a while when we take the global market into account.

    Take Amazon.com (I have no idea if the figures are right, but follow the example & correct the figures, if you don't mind) - say they sell their books at 5% above cost. Now probably 4.8% of that goes on costs - leaving 0.2% profit. Now because they are so big, and sell so many books, that adds up to a reasonable amount.

    While the barriers to entry are low on the Internet, there is now the whole "Amazon mindshare factor" which need to be combatted - with money. The only companies that really have enough money to take Amazon on are the already established companies (except in specilized areas).

    Now, obviously, Amazon is overvalued in comparison to establised (non-book) companies. But should the value of the establised (non .com) comapanies go up, or should Amazons go down?

    Well, the Internet does allow non - .com companies to cut costs in the same way as Amazon has. When they do this, they might have to cut profits - which reduces the P/E ratio. Now if the company is making very low profits, but is dominating the industry, perhaps it is a good long term bet - those profits allow it to stay ahead of the competition, which has to cut its own margins and profits to even try and compete.

    If all companies, in all sectors of the market begin to drift towards this low profit, high volume model, perhaps we will see a correction in the compatitive value of each company and sector of the market.

    I know this low-profit, high-margin idea isn't going to popular with those fans of the high-profit, small "one man" company thing, but I don't see it being a long term proposition, except in emerging sectors of the market.

    I'd love to hear what someone who knew what they were talking about thought about this - although I guess no one really does.

  • a saying we used to hear :)

  • I would like to take a moment to expand on the earlier comments, and focus more on other /.ers.

    The false perception that internetworking is something new is forcing companies to concentrate on 'position position position' instead of actually applying the tech to make a buck.

    I'm sure I'm not alone, being stuck in a meeting with someone who doesn't understand the value of a network. Someone who, when describing the internet uses words like "exciting" and "new". (reminds me of the old loveboat theme:).

    When you find yourself in a meeting with someone who has seen one to many .com advertisements and wants pie in the sky things out of your network, use these little tools to deflate there position and keep them grounded in reality and out of the hype high.

    1) Bring several printouts of Hobbes' Internet Timeline [isoc.org] to the meeting and let them take it home to read.

    2) Use the term 'Internetworking' instead of internet to illustrate that this isn't anything new.

    3) Point out this is an evolution of many high minded ideas and compromises [isi.edu] that have evolved internetworking to where it is today.

    4) Point out the many protocols [isi.edu] that have run over IP, each proclaiming themselves to be the new new thing.

    I have found these tools to be both educational and informative on many occasions, and it helps bring the discussion down to a real world level where real work can be done. So the next time you find yourself in a meeting with 'consultant-of-the-week'. I hope you find these tools useful.


  • the last thing Mr. Greenspan is ever going to do is come out and say that one of the largest areas of the stock market is just so much vapor--because that would send everyone racing to sell their stock and ditch all tech investments, which would kill that sector of the economy.

    You seem to be ignoring the fact that Mr. Greenspan has in fact done exactly this on more than one occasion. Remember the 'irrational exuberance' speech? Mr. Greenspan is a firm believer in correcting problems as soon as possible. If he felt that the internet 'bubble' was indeed a severe problem he would come out and say so in hopes of catching things before they turned into a bigger problem.

  • then give it away to your favorites causes
  • It strikes me again and again that some people seem to be "intelligent" but not "clever", whatever that may mean.

    The whole money issue is part of reality, and will allways be, if we may believe economic theory; so I guess the only way to deal with it, is to confront it the way it is.

    In the end, this kind of people tend to become beggars, and then what?
  • I just don't see it. I just don't understand the growth projections being as high as they are.

    The people making these projections weren't born yesterday. It is well realized that growth follows an S curve. And it is NOT about company web sites that are merely store fronts. Or ordering books. It's about the fact that consumer use of the internet is now less than 1% every rational estimate of the final equilibrium state, and business use in MUCH LESS than 1%. And that is in the US. The internet is global, and the penetration in countries other than the US is far less. US internet companies are in a strong position to gain a disproportionate share of the value of the GLOBAL process.

    Do you realize that in any manufacturing company in the US, G&A counts for something like 30% of the cost of production? And what is this G&A? It's accounting, accounts receivable, payroll, and innumerable other tasks where people STILL handle and pass pieces of paper around! It costs most companies between $50 to $100 to handle each and every purchase order and requisition. There is NO NEED for this.

    Ditto the stuff you get in the mail every month. In the US something like 40% of the cost of your long distance phone service is the cost to send your bill, and process the check that you send back in the mail.

    The internet has JUST STARTED making an impact, and it is already affecting the entire US economy.

    The impact potential is in the HUNDREDS OF BILLIONS OF DOLLARS PER YEAR just in the US. World wide it is probably more than a trillion per year.

    Companies like AT&T are not spending $2000 per house that their cable goes by just for internet shopping. It's about telephone + videophone + interactive video + all sorts of ecommerce + telecommuting + banking + ...

    The projections are based on:

    1. Existing growth rates.

    2. Amount of capital being invested in infrastructure to feedd future growth.

    3. Existing penetration into the world economy.

    4. Potential economic efficiency improvements. .

    5. The immense synergy that is finally available because nearly everyone is being connected. While internetworking isn't new, the universality connectivity is very new. I am sure the you know as well as I do that the potential value of a network is of order N^N.

    I think VALinux is Proof that the tech sector is overvalued by people not close to the tech

    I am sure that there are any number of stocks that are overvalued. VALinux is probably one of them - along with RedHat and Corel AOL and Amazon. However many of these, like VALinux are not internet stocks.

    The point that I am making is that there are a lot of very careful thinkers who believe that the internet sector AS A WHOLE is NOT overvalued. It is not a matter of engineering; I personally think engineers are not in a position to judge the economic impact of what is happening. They are looking at the implementation, not the social and economic impact of the implementation.

  • Not to draw too much attention to the guy, as he really doesn't like publicity much. (I've been in the department with him for 5 years now, and I've met him maybe two or three times.)

    But, now that's he's been mentioned on Slashdot, it might be appropriate to blow his trumpet a little bit. He did a whole lot of interesting things for Unix during the 70's, including the first disk quota implementation, and was apparently very important in the early years of AUUG (the Australian UNIX Users Group).

    Australia, including Elz, played an important part in the development of the Unix culture. There's a book called Twenty-Five Years of UNIX which discusses some of this.

  • People may abuse NSI for stuff ups in Domain Name Allocation but we Australians have a person to abuse. Robert Elz has in the past made up Domain Name rules whenever he felt like it and enforced them whenever he felt like it. Example a company called Reveal Software applied for the domain reveal.com.au. They were told they could not have it because the domain reveal.com was already taken. And nowhere on the site did it have this rule explained. He also had the rule that you could not register common words, but has allowed gold.com.au and news.com.au (Rupert Murdoch owns that one). Maybe he's upset that now it's a corporation he can dictate naming policies the way he wants to.
  • 2 highly principled people (within weeks), with the will power to actually stick to their principles when HUGE wads of cash are dangled in front of their noses. My belief in humanity is slowly coming back

    Dunno, I think if that I was offered legal money that I considered dirty for my own reasons, I'd take it and make a point of donating it all to worthwhile causes. Sticking with your principles and doing nothing is fine, but leeching off the evil bastards to make the world a better place is even better.

  • > It is a mathematical law that the connectivity
    > of a network is in fact O(N^N). These
    > connections are the generators of value on
    > the net.

    The number of connections in a network is O(N^2). To be precise, there are N(N-1)/2 connections among N nodes. This is not even close to N^N (for 100 nodes there are 4950 connections, N^N would predict 10^200 connections)
  • You forgot:

    1(a). In the US at least, they don't have to pay taxes. That's right! Just like a church, except they get to participate in business ventures, some of which are *very* lucrative, up the wazoo.

  • "...they invested there life savings in a Pentium II on a fractional T1 in the university janitors closet."

    :D This is so close to the truth it's scarey. I've seen where my local POP for compuserve is here. It's in this pretty run down trashy building down in this gross basement that's so dirty... well, nuff said. yick... :P

  • Can I have his share? :)
  • 2 highly principled people (within weeks), with the will power to actually stick to their principles when HUGE wads of cash are dangled in front of their noses. My belief in humanity is slowly coming back

  • Why shouldn't he benefit from it? It's a business venture, plain and simple... I think it's good that, if it runs counter to his opinion/belief, he didn't take the money. But I must ask why? It's the same as any other business venture. I dunno though. I guess he's probably a man of principle.

    Child: Mommy, where do .sig files go when they die?
    Mother: HELL! Straight to hell!
    I've never been the same since.

  • by Anonymous Coward
    This guy has the right philosophy but is applying it wrong. Money... is good. There is lots of profit to be made selling domain names (Registrars are no different than squatters. They just have gov't backing and own all domain names by default until someone "registers" them. If that's not a squatter, what is? But I digress.)

    Anyway, this guy's goal should be to have the profits put back into the university to improve learning. New computer labs, new courses, more faculty, smaller classes. It's okay for profit money from the community to flow into the university just make sure it goes right back into the community to help everyone.

  • I nominate Elz to be one of the godfathers of the internet. Someone who can't be bought has uncorruptable direction, true power and influence.
  • by Money__ ( 87045 ) on Sunday December 19, 1999 @06:58AM (#1461803)
    Robert Elz will prove to be correct in the long run. The article points out that Melbourne IT is now listed at 136 Million dollars.

    Now I can see that it's not just the USA stock market that laughably overvalues it's internet stocks, in fact, the entire world overvalues anything that has to do with the practice of internetworking computers (a 30+ year old technology).

    The internet bubble will adjust it's valuation (read:crash) and people will wake up to find they invested there life savings in a Pentium II on a fractional T1 in the university janitors closet.


  • at least they walk the walk and don't just talk the talk

    it all comes down to making your politics personal... if you espouse something, personalize it, live it, make others understand that you truly believe it

    i have nothing but respect for RMS for his stand... he drew a line in the sand and he's sticking to it!

  • RMS did pretty much the same thing -- he refused any interest in some of the big Linux-related IPOs, even though it was offered to him.

    What bothers me about this whole thing is that a lot of people, RMS included, are acting really high-and-mighty and ripping on people like ESR who made money in the last few weeks. Now, personally I think ESR's post-wealthy statement here was completely unneccesary and more than a little bit on the arrogant side, but it's still nobody elses business how you conduct your finances.

    We all know that ESR made a bunch of money with VA, and I think that's really what counts. If we see him wearing "VA Linux Rulz U" shirts on the circuit from now on, we'll know why. The act of making money shouldn't put someone's credibility into question, it should be a question of if they sell out afterwards. Look at JWZ -- he must have made some money from Netscape; if I were unemployed this long, I'd be searching through garbage cans for tomorrow's meal. Despite this, he has still been wonderfully critical of the hand that feeds him.

    That said, remember: Being a one of the three-initial gang never included a vow of poverty. If any of them want to take advantage of the opportunity to live comfortably for the rest of their lives, that's their business. We shouldn't sweat it; if it ends up effecting the way they act or if they start doing something stupid (mindless disto-specific boosting in public, etc), the same community which lends them credibility can take it away.


  • by Issue9mm ( 97360 )
    One thing to note, with the currency rates, $125 AUD==$80.31 USD.

    The article claimed that they had set up "a commercial margin, but a very small one". Now, who exactly do they go through? With our competitive brokers in the US, Joker.com costs $37 for two years, while OpenSRS claims to cheapen even that by a little.

    Just seems to me, that maybe they're overpaying. Heck, you could just as easily get a .com, .net, or .org address for cheaper, and without having to type in three little extra characters.

  • I'd say what he did was right. Principles are worth more than money. =P

    "Failure comes only when we forget our ideals and objectives and principles." -- Jawaharal Nehru
  • I remember back when being a member of the TLA crowd just required a vow of lunacy. With all the mainstream attention and respect these people are getting, now, that committment to insanity seems to have been severely undermined.

    At least we know we won't be seeing RMS promoting electric shavers any time soon, eh?.
  • Robert Elz has walked away from a fortune, wanting no part of the second-biggest Internet float after Kerry Packer's ecorp.

    Wow, what a schmuck!

    Sorry, it had to be said.
  • My hats are off to this guy. Like RMS and a select few other geeks, this guy chose not to cash in. His reasoning was alittle different than I would have hoped, but hey. :) I'm really hoping more geeks will go the route of Socrates[1] and prove to the world that, while they could easily make alot of money, they choose not to because there are more interesting things in this world to do. If there's ever been a culture that could crack the US' (and many other countries now falling under the term "global capitalism") obsession with money it would be our culture.

    [1] historical reference (it might have been plato) about a greek philosopher who was challenged by local merchants that he did nothing with his life and could never make money. He proved them wrong by carefully analyzing the market and then buying out olive production in the area. Next spring olives were in short supply due to a dry spring and he made a killing. Feel free to correct me here, I'm sure I've made some minor factual errors (I didn't spend as much time awake in philosophy class as I wanted to).

  • Yeah I think thats what he should have done. But hey why am I criticizing ?
  • by the eric conspiracy ( 20178 ) on Sunday December 19, 1999 @07:31AM (#1461813)

    Alan Greenspan, chairman of the US Federal Reserve (Central Bank) who is relatively conservative when it comes to asset valuations has made very interesting comments regarding the "internet bubble".

    When asked about it in front of a US Senate Finance Committee meeting, especially if he viewed it as a destabilizing financial factor he stated the following (I am working from memory here so don't fry me I get some details wrong).

    1. The internet is having a measurable and strong effect on improving economic efficiency and worker productivity in the US.

    2. It is quite clear that the internet is in its very early stages in terms of its economic growth and effects on the economy. In particular investments that are being made in internet infrastructures in the US are huge by any standards, and will have an inevetable impact in the shape of the economy for many years to come.

    3. Taken in these terms, the total valuation of internet stocks measured against the current value of the existing and net present value of potential economic activity is at appropriate levels even by relatively conservative estimates, and may in fact be undervalued.

    4. Participation in existing internet equities is very risky because at this stage as it is impossible to predict who the winners will be. However the valuation levels of the sector as a whole are appropriate and do not have any real potential to destabilize the stock market. In early growth situations like this investing in equities is similar to placing bets at a horse race - you have poor odds of picking a winner, but there will be a winner, and those who choose the winner will be handsomely rewarded.

    So Mr. Greenspan, based on a fundamental economic analysis thinks there is no internet bubble; a rather startling conclusion to those who are looking at stock valuations in the present atmosphere. He does however warn that picking a horse to ride may be very risky business.

    So - should you buy AOL stock? Probably not. But should you buy an internet mutual fund? Probably yes, especially if you have an investment time horizon of five years or more.

  • Probably with a lot of peace of mind!
  • by LL ( 20038 ) on Sunday December 19, 1999 @01:00PM (#1461815)
    ... take a look at this article [smh.com.au]. This highlights the contrast between the traditional bread earners and the so called new IT revolution. One needs to question what is wealth creation or even the definition of profit. The capitalisation of a company is nothing more than the expected discounted income stream plus expected growth. Hence if a company is valued at say $1 billion, shareholders expect a company to earn at least that much in profits (or revenues in the case of .com fluff) over a period when it is deemed to have a competitive edge. For some strange reason the assumption is that share price is roughly analogous to dominance in market share (ie the number of customers you "own") which seems a little presumptious considering that with the reduction in transaction costs, there may be multiple paths/sources to obtaining the same good or service. Thus as soon as a new competitor arrives, the share price drops to indicate a dilution of the market. Why would an IT cartel have such a high "value" compared to a farm which produces so called essentials. Basically it relates to the laws of supply and demand and people mistaking a trajectory which they assume continues forever. Domain name registrations will slow down once every business and person has an account (or we run out of recognisable letters). Once the marginal costs reduce down to the actual operating costs of renewing a site, then you will see some serious cash-flow hiccups along with brutal competition to keep others from poaching your customers. and then maybe it might be smart switching your vaporcash into a real farm. IT companies only have growth potential so long as their products result in improved productivity and capabilities. Once the stress and pain becomes too much (as in the case of a not-so-popular OS) then people start resisting. The real competition to software is not other players but your historical software and customer habits. People tend to underestimate the risk premiums in share prices and until a crash or two happens to kill off the ignorant, rationality won't return to the share-market. Also, it would help if politicans [brw.com.au] kept their meddling hands out of the pot.


  • I didn't see anyone saying this before I did; in fact someone said it again after [slashdot.org] me further down the line (his is #35, mine is #23), and then #41. I didn't see this suggestion in any posts before, so what made what I said "redundant"?
  • We may well be getting offtopic, but let me first thank you for an educational and enlightening post. You've brought up many valid and informative points that are spot on. If you would indulge me for a moment, I would like to shine some light on some other areas.

    Last thing first, like Mores law, Metcafs law (N^N) is a self serving observation of a trend, not a scientific fact. This trend is directly related to how open the network is, and is based on a trust model. As more companies are added, look for companies/governments to set barriers to connectivity (Read:AOLs IM, .AUs oppressive laws, proprietary broadband boxen..ect.)

    US internet companies are in a strong position to gain a disproportionate share of the value of the GLOBAL process.

    I'm sure many over the border users will attest to the fact that there isn't much global about the internet today. A(merican)SCII text being pushed from domain to domain registered by NSI.

    If our good friend Mr. Berners Lee had chosen to name his approach to hypertext "European Wide Web" (EWW just doesn't have the same ring to it:) ) would you be toughing the eventual penetration in the EU community instead of extrapolating projections globally?

    I would put forth that the reason the global penetration is so low is because there's nothing world wide about the world wide web. It's very American, and it's growth should be extrapolated as such.

    It costs most companies between $50 to $100 to handle each and every purchase order and requisition. There is NO NEED for this

    I can assure you there is a need for this. ISO 900* certification is just one example of the many G&A tasks that can benefit from automation, but never be replaced by it. The question still on my mind is how much of the ~30% G&A cost is expected to be resolved be increasing connectivity? 2%? 5%? maybe 8%? connectivity and convergence is a communications evolution, *not* to be confused with revolution. We have been in the midst of the evolution for over 30 years, and it will continue to evolve. Some examples:1)wearable computers =your beeper
    2) Instant global communication =Iridium
    3) Computing extending human capabilities =Palm Pilot
    4) Wireless Computing extending human capabilities =Palm 7
    Again, note the emphasis on evolution, not revolution.

    All of these solutions were achieved because the capitol and technology just happened to be around at the time. Where would the Palm7 be without a well distributed PCS network? Where would PCS be with out a well distributed Cellular network . . Again, note the emphasis on evolution, not revolution.

    So to sum up the act of internetworking is in the midst of a 30 year evolution and will continue on that path. Just because 95% of people are just waking up to that fact does not mean we should loose our heads with over speculative projections. I thank you for your time and attention and welcome any comments.

    Oh!. and one more thing: Companies like AT&T are not spending $2000 per house that their cable goes by just for internet shopping. It's abouttelephone + videophone + interactive video + all sorts of ecommerce + telecommuting + banking + ...

    Take the $2000 and extrapolate that over the life of the twisted pair phone network in the USA and it's a trivial investment. Fact is, this is the first time AT&T has actually has been asked to increase bandwidth to the end users (something that shouldn't be shocking and amazing), So this particular out-pouring of capitol should be spread over the life of the network they are upgrading.


  • Anyone who has ever had to deal with re-delegating an .org.au domain (Elz manages the .org.au namespace, personally, in his spare time, like he used to do with .com.au) will be glad when the guy has nothing to do with it anymore (early 2001). Waiting six months for a re-del is a bit of a piss-take, if you ask me. However, he doesn't seem like too bad a guy (hell, Sun gave him a box in 1991 for the hostmaster archie.au because he whined enough :-), but he does take his bloody time.

    Also, his sense of humour is definately acquired - reas his "humorous" RFCs if you want an example :-).

  • Wow, what a schmuck!

    While I would not put it that way, I must say that I don't see the nobility in refusing profit made from your work. I don't see what moral principle is being upheld here.

  • Well, I dunno about that. What is so wrong with making money?

    Well, I'm an opinionated son of a bitch and can often get away ranting about an unpleasant vendor on my homepage. But mone could make me popular. Or suddenly unpopular if I by chance mistakenly create a conflict of interest. Shit happens.

    Say, for example, if I have a few bucks. Now if I say something especially unflattering about a vendor with money in my bank, especially funds contributed from one considered its competitor, and I could have some issues to deal with as their loyal partners and legal department come a knocking at my door with papers. No fun. Keep the dirty money out of my hands, thank you!
  • by Money__ ( 87045 ) on Sunday December 19, 1999 @08:34AM (#1461824)
    . . .When Mr. Greenspan talks, people listen, but people should listen closer.

    Your quote of the 1st. point he made, I agree with completely " The internet is having a measurable and strong effect on improving economic efficiency and worker productivity in the US". Email instead of faxes, the publish/subscribe information model, and the low barrier to entry result in measurable increases in productivity. However, these advances in the business model are only advances while a difference between companies exists. It's the last point, the low barrier to entry, that will render this market influence ineffective. Even the most casual enterprise (read:the late 90's .com rush) will dilute the .com brand name, and the marketing buzz that goes with it.

    On the 2nd point: "It is quite clear that the internet is in its very early stages..." is exactly the kind dangerous thinking that leads to overvaluation. Pump it out on TCP/IP and buy a little advertising time for your domain and you're at the forefront of a new economy? I just don't see it. I just don't understand the growth projections being as high as they are. maybe I'm to close to the tech to see the big picture, but I just don't understand the value of a companies IT department taking the company BBS and slapping a HTML front end on it accounts for "having an inevitable impact in the shape of the economy for many years to come."

    The 3rd point: "... and may in fact be undervalued." are based on future projections of internetworking penetration and usage. It's an interesting observation, and may well be true, but there's that old market warning "past performance is not indicative of future performance" that could be aply applied in this case.

    I think VALinux is Proof that the tech sector is overvalued by people not close to the tech, overvalued by people not even vaguely familiar with the companies ability to make a return on there investment. It's like betting on a horse based on his position in the starting block. The false perception that internetworking is something new is forcing companies to concentrate on 'position position position' instead of actually applying the tech to make a buck.


  • Instead of refusing to take part in a IPO, why not take it and donate a hefty amount of money to some cause you feel is worthwhile?

    The immoral powers that be rarely give the good people any chance to inflict change. Refusing their bounty is one way to send a message, but the most effective way to fight is to take from them (especially when they foolishly offer it to you) and give to the 'good guys'.

    Just an idea..
  • by n1pper ( 122127 ) on Sunday December 19, 1999 @08:53AM (#1461826)
    Has anyone noticed the stark parrallels between todays stock market conditions and those of just pre-great depression conditions? Stocks that are not actually making any money and usually are losing it are being offered to the public and being sold for hundreds of millions of dollars... It's pretty common knowledge, in the geek circles I move through at least, that pretty soon somebody is going to realize that none of these companies are making money, and pretty soon everybody is going to realize it, and then what happens? The soaring stock market begins to drop, like an investor out a window. Also, just before the big crash back then, all the analysts were saying things like 'This is the most prosperous time in America ever! By the looks of things, this upswing will never end!'. But it did. And I think it's going to again. So in a round about way, it's probably just as well that Elz didn't take the money, it'll probably be worthless in 3 or 4 months anyway.
  • I know this is off-topic but the article said something about him living on a 28 rather 24 hour cycle. Could someone point me to some info on what that is about?
  • "Money... is good. "

    No, it isn't. It's just paper. It's boring.

    What you do with your life is good or bad. The way you spend you time is good or bad. Some people prefer to spend their time accumulating money, and then using that money to convince other people to do good. Others may prefer to simply do something good directly. A rare few may manage both at once.

    Trying to convince someone that money was worthless one day, I burnt a ten pound note. He was really quite angry about it, complaining that it was a bad thing to do - If I wanted to make a point about how cool I was I should have given the money to a homeless person or a charity.

    He was missing the point in a big way. Money is not this wonderful substance that can be converted in a flash into wonderful things, great deeds, and life saving substances. Money is just a mutually agreed incentive to perform acts. Some of us rather prefer a life where we go out and do those acts directly. There's something much cleaner about that - it's hard to explain.

    So, I've got a whole lot of time for people who opt out of the money go round, and alot more respect than I do for those who make a stack of cash selling crap to bored housewives and then "Donate millions to good causes".

    So, If I hear people fawning over ESR in a years time for personally donating 1 million bucks to the FSF or whatever, then I'm going to feel pretty damned unimpressed, compared with a guy who just sits there and gets on doing with his life what he thinks is the right thing to do.

    Sermon over :-|
  • You're kidding, right? I've always figured MelbourneIT are already making a fortune. I work at a pretty average-sized ISP, and we could be registering three or four .com.au's a day.

    Multiply that by the number of ISPs in Australia, and you start seeing just how much money MelbourneIT could be making on new registrations alone, not even counting existing registrations.

    And it's not like domain names have a huge overhead. You can do 95% of the processing automatically, and running the root nameserver for the TLD would cost many orders of magnitude less than the per-domain fee.

    Meanwhile, there are no plans for any competition in the .au namespace, making MelbourneIT an even more attractive proposition.
  • Piet Beertema [domain-registry.nl] never asked for compensation either. The registration he set up in Holland was seen as an example in several other European countries.
  • I forgot to mention that he got knighted, since that's what the article (in Dutch) I refered to was all about.
  • 7) Company starts to 'downsize' and 'lay off' worker to 'increase' efficientcy.. in order to drive the stock price and profits UP. So.. in the end, peoples greed for a 'better' return on investment caused them to get laid off in the first place.

    The flaw in your reasoning is that any company that does not operate efficiently gets run out of business by those that do, resulting in no profits, no employees and zero stock value for the investors.

    Companies cannot be charities or welfare agencies.

  • nothing is wrong with making money
    but it's another thing to have principles and stick to those principles when they're tested.

    And why was my original comment moderated down?
    I makred it off topic myself, it doesn't need some wanker with moderation points to go "Hey this here's off topic" Third time in a week this has happened. I get asked a question, the answer doesn't pertain to the discussion, and so it gets moderated down. Sorry, rant over
  • its fairly obvious and it's been stated before on earlier slashdot stories (ESR's for one). anyway, moderation on /. sucks...but i cant think of a better system.
  • While Moore's law is an empirical observation, Metcalf's law is not. It is a mathematical law that the connectivity of a network is in fact O(N^N). These connections are the generators of value on the net.

    Now perhaps someone will try to restrict access for political reasons. The Chinese certainly already have. But the Chinese are having to back away from their access restrictions because the economic consequences of these restrictions are so severe. There is an empirical law about the internet routing itself around such restrictions which I think will in the long run hold true.

    One person here commented on using the Hobbes timeline. I found it very interesting that none of the curves shown there had inflection points (second derivatives = 0); that is growth of the internet is still accelerating.

    Take the $2000 and extrapolate that over the life of the twisted pair phone network in the USA and it's a trivial investment.

    Corporate capital investments are not made this way. AT&T could put this money in the bank and get 8% or so. It is having to borrow a considerable amount of capital to make some of these acquisitions at 8%. In order for this to be profitable an/or be worth the risk of the investment, AT&T is going to have to make a profit in the range of 10-12% at least on this $2000 investment.

    As far as the global nature of the internet goes, right now North Americans are SLIGHTLY more than 1/2 of the people on the internet. Projections are that this will reverse next year, and eventually the proportion of Americans on the internet will parallel the proportion of the world economic activity - about 22%.

    A lot of people talk about the internet as a 30 year old phenomena. But the fact of the matter is that for most of this time the internet was a defense project accessable only to research scientists at well funded universities. The internet as a world-wide web accessable to anyone with the scratch to pay for an ISP has only been around for about 5 years.

    People talk about internet time. And overvalued stocks. And draw parallels to the roaring 20's. Well, I do not think this is a good parallel.

    There are other times in American history where the stock market grew at a rapid pace. Without a following bust. In the very early part of the 20th century there was a boom in the stock market occasioned by another technological invention. The automobile. There were some 300 automobile manufacturers in the US, and many had crazy stock valuations. Most failed. But those that succeeded made some people very rich.... And then there was the 50's and 60's. All the technologies that had been held back by World War II came onto the market. Companies that took advantage of technologies like television again made some people very wealthy indeed. Ther other examples - railroads is one that comes to mind immediately.

  • I work with people who buy shares on credit, they know how the stock market works. Right now they're going ok because the markets are going up, but these guys know little more about the market than I do (ie. fuck all).
    Minor corrections make these guys start selling. It's not going to take too long before some analyst says to sell and all these lemmings start walking towards the cliff.
  • Wow... you just gave words and form to something that's been bothering me for years, but never quite crystalized in my mind. Now that it's stated plainly, it seems so obvioius.

    Thank you. :)

    Now *that's* offtopic.
  • While reading the article at work on Saturday, a thought occurred as I read the words 'non-exclusive license'.

    Did anyone else (particularly Aussies) think that we could have cost price domain names by simply forming an association and registering domains for free (not including Internic fees or whatever).

    Judging by Elz's attitude that the net should be free, would it seem feasible that he would allow a second organisation to register names? I know there was the whole .au.com fiasco, but that was another commercial venture. Imagine the share prices for Melb. IT plummet if it was allowed.

    is this idea feasible?

    if the week before's articles are still available there was a nice story on John Lions you might wanna check out.

  • I'm really hoping more geeks will go the route of Socrates[1] and prove to the world that, while they could easily make alot of money, they choose not to because there are more interesting things in this world to do.

    Yeah, but in this case, all he has to do is sit back and let the riches accumulate, he can become rich and *still* go out and do the more interesting things.

    Your historical reference is to someone who made money on the ancient Greek equivalent of the stock market. What is the relevance of this story to your argument? It seems to argue as much against as for the point you are trying to make.

    It's good that this guy follows his principles, though I would have had just as much respect for him if he'd taken the cash. It would have been more impressive if he'd stayed out of the papers, though.

    Telling the world how virtuous you are is just another form of pride. Mr Elz is not really guilty of this, though RMS might be.
  • Bear in mind that I think you're right--there are some companies in the tech sector that are grossly overvalued, but the area as a whole is pretty much on track. But there's also another way to look at Mr. Greenspan's comments.

    He is, IMO, the single most powerful man on the planet, and he has every reason to be aware of that himself. Remember when Mexico was set up for a run on their banks a few years back (I don't remember exactly when)? A situation which could potentially have brought the Mexican economy to its knees (and done its share of damage to the US's, too)...and it was averted entirely simply by Mr. Greenspan saying that the Fed was extending its insurance guarantee to Mexican banks, which guarantee, of course, never got called out. (Granted, the Mexican economy later suffered huge currency problems and was only saved by an IMF/US many-billion-dollar bailout, but the anecdote still illustrates my point).

    The point, of course, is that confidence and the economy are damn near the same thing. So the last thing Mr. Greenspan is ever going to do is come out and say that one of the largest areas of the stock market is just so much vapor--because that would send everyone racing to sell their stock and ditch all tech investments, which would kill that sector of the economy.

    Stage 1: Financially sound bank.
    Stage 2: Respected Banker(tm) says: "That bank is shaky"
    Stage 3: Customers proceed to withdraw all their money from the "shaky" bank.
    Stage 4: The bank is shaky

  • According to the article, he is still the main administrator for .au, and Melbourne IT only has a 5 year license. In 2001, it expires, and it would serve them right for him to grant the contract to someone else, since they have since disobeyed his explicit wishes and raised prices on these domain names. Or at least renegotiate the contract so they have to follow his wishes about pricing.
    I find it ironic that Gerrand "thinks Elz should be honoured" for his position, but won't honor Elz with his own actions. What an ass.
  • Look, the money is out there. It exists, and it won't go away.

    The question is, who gets to be the custodian of that money?

    If you think, if you feel, if you have any ideas in your head, if there's anything you believe in... having money and using it purposefully can bring the world just a little bit closer to the way you'd like it to be.

    All the more so if you're an outspoken public figure... how can you solicit donations for a cause, and then walk away from the opportunity to make a giant donation yourself?

  • One thing about the pre depression stock market was that the rules were very different. You could loan ten times what you actually had and use the money to buy stocks. When a lot of people are doing this then the stock market is kept high, but no one can afford to lose even a tenth of what they had invested.

    Nowdays stocks are inflated in large part because many people put retirement money into the market. If you are retiring in 20 yrs you can afford to lose this money. Heck, if the stock market goes down buy more more. If you are retiring any time soon then you need to be very careful.

Save the whales. Collect the whole set.