Keeping up with the neighbours gets expensive quickly. The sexy wheels in the driveway, the designer kitchen . . . The cycle of one-upmanship can only end in buyers’ remorse.
There seems to be a little tit-for-tat going on in the cul-de-sacs of ecommerce. Wednesday brought reports that New York-listed Chinese ecommerce marketplace Alibaba had invested in US messaging app Snapchat, receiving about 1.3 per cent of the vanishing-photo app for $200m. On the same day, Lyft , the US ride-sharing app, announced that it had sold a 12 per cent stake to the Japanese internet shopping-to-finance company Rakuten for $300m.
It might be easier to divine the benefit of these splurges if the purchases stuck to a single theme. But Rakuten and Alibaba have been serial acquirers. In 2014 alone, they indulged in nearly 20 deals apiece. Each has a stake in a football club; at least one messaging app; a mobile device maker; and a ride-sharing app — or two, in Alibaba’s case. It has a chunk of Lyft, too, as well as a Chinese app.