The so-called new economy is about disintermediation. That’s what it has always been touted as. And I think there’s validity to this. It’s interesting to see how incumbents deal with this disintermediation, especially when they have government-regulated markets.
A perfect example is Airbnb. The company just closed a $500 million round of funding that values the enterprise at $10 billion. The company is basically a peer-to-peer hotel/bed & breakfast rental site. It allows normal people to rent out their homes and get paid for doing so. Now, we could look at the valuation as bubble economics because the numbers are too large. I certainly do. For example, the company is worth more than Intercontinental Hotels – a company that owns property, not just a platform.
Or we could also see the...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.