Month: November 2012

In the last 7 years, Reddit, the giant bulletin board made up of 185,000 + forums on everything ranging from news, photos, arguments to jokes, has taken a large leap. From being a site started by two freshmen students from the University of Virginia in 2005, originally created as an online food ordering site, Reddit has transformed into a website that attracts 500,000 visitors per month.

So what is Reddit worth?

Because Reddit was just recapitalized by Advance,  having bought $20 million preferred stock and owning 2/3 of Reddit, the calculations imply that Reddit is on track to be worth more than $240 million dollars.

So what is Reddit’s secret to success?

Reddit is not your traditional website. It does not attract the upscale big name companies to advertise on its website but it does attract advertisements from movie studios, gaming companies and other smaller web based brands. It doesn’t need the big name sponsors to become a good business though. Reddit is a ‘paragon of thrift’, according to Forbe. What this is means it that the company spends only $7 million a year to support only 22 people on payroll and 75 servers from Amazon’s cloud. These expenses are covered by the advertisements it gets from the smaller companies and thus can create substantial revenue for success.

The company has a totally different business model but it seems to be working.

Click here to browse the Reddit Website

This is a post in reply to Andrea Banzon’s blog post on the concept of mobile credit cards.

Allowing smart phones to substitute a wallet could be the new and upcoming form of business technology management. Mobile credit cards is a viable and inviting technology for customers. It makes for easier payment processes. Consumers will no longer need to lug a wallet around but instead just bring a smart phone around to pay for purchases. A poll shows that 47% percent of Canadian smart phone users would consider using a mobile credit card. Since only two RIM phones are capable of these abilities, the mobile credit card market has not been exposed to the general audience. Once the majority of smart phones become adapted of this new technology, more people will be inclined to use this option of payment.

For example, Starbucks has had a headstart on such a service. Although its mobile app is only integrated with a Starbucks card for payments instead of a credit card, its success can still be measured. Many consumers find it convenient to be able to make payments through scanning a barcode on their Starbucks mobile app.

A mobile credit card would allow consumers to do this with all products. This technology has the potential to become one of the most widespread forms of payment.

For the last 3 years, the 17 countries in Europe who use the Euro have been battling a financial crisis. There have been signs in the market that show that the crisis has now climaxed; the worst may be over for Europe.

Here is some evidence taken from USA Today’s article “The worst of Europe’s Crisis May Be Over”

1. falling borrowing costs – lower interest rates (Spain’s two year bonds: interest rate – 6.6% in July 24th down to 3% now)
2. rising stock markets (The Stoxx 50 index of leading European shares has increased 26% since June 1st)
3. steady but slow stabilization of regional banking systems
4. Increase in foreign loans to Eurozone Banks
5. European leaders taking steps to steady banks and governments – ease up austerity, use bailout funds to buy bonds

These are signs of reassurance that the Euro may in fact stay alive and functional. However, there is still the possibility of a breakup and there are many challenges ahead for Europe.

Greece. Spain. Banks. These are the 3 biggest challenges that lie ahead for Europe and its financial stability.

It is estimated that Greece still needs bailout funds of approximately 30 billion Euros because of its shrinking economy.

Spain’s prime minister is refusing to request unlimited amounts of governments bonds as aid from the ECB even as the country’s debt is piling higher and the economy is shrinking.

Banks are suffering from the losses on government bonds they bought and loans that aren’t being repaid. A banking supervisor for all of Europe could help partner crippled banks with healthier ones.

Economic growth is what Europe needs to pull itself out of crisis mode. This depends on what government do during the next year to cure its severe ailments.

After our lecture on entreneurship, I wanted to search up any news on the topic. What exactly is happening for entrepreneurs around the world?

I found a Forbe’s article, “Are We on the Verge of the Greatest Entrepreneurship Bubble?” and want to elaborate on my findings. Recently reelected president Barack Obama signed a new act, the Jobs (Jumpstart Our Business Startup) Act, to encourage funding of small businesses in the form of crowdfunding. Because many aspiring entrepreneurs lack the initial start up capital and are often deterred by negative investment climate, projects are never fully taken to its full potential. The new Jobs Act will help catalyse the growth of new businesses through a different form of investing.

Crowdfunding is the collective effort of different individuals to pool together funds and resources to support other people’s initiatives and organizations. A benefit of crowdfunding is that it brings in investors of different types – ones who are concerned with making profits and ones who invest for innovation and change.

This is just the beginning of a major project. It will be interesting to see how this act will affect the US economy and the world economy overall, especially in the small business sector.