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How to make yourself a billionaire with a failing social network.

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How about this for a pitch. A new social network - only you pay for this one. For your money, you are guaranteed the opportunity to interact with celebrities, leading business people, sport stars and top technology people. Essentially, you're buying contacts and conversations with the world's movers and shakers. Think it'll fly? Well, it already has.
It's called Introbiz and it was founded in Nevada by a businessman called John Kueber in 2008. He owns a company called Cynk Technology, but the site itself has no assets, no profits and only one member of staff. That's John Kueber too.

'So what?' you ask. Just another phoney-baloney tech start-up doomed to failure, right? Not quite. Because recently, in just sixteen days, shares in Introbiz rose 25,000% to produce a valuation of $5billion.

Observers of stock markets are well used to the roller-coaster behaviour of new-fangled companies - but a rise of 25,000% tends to attract attention. And so it was with Introbiz. Even in the fantasyland of stock trading, some things are too good to be true. Close to the peak of the firm's share price, the regulators stepped in to suspend the buying frenzy, using the euphemistic explanation 'There is a lack of knowledge in the market'.
This roughly translates as 'You're all mad, have no idea what you're doing, and are likely to cause an enormous bubble of monetary stupidity.'

How does this stuff happen? How do reasonably clued-up people start pumping their (and other people's) hard-earned cash into a business with no employees, no proven prospects nor any money in the bank? Couldn't they just back oil companies or Transformers movies?

Yes, they could. However, you won't be entirely surprised to learn that stock markets don't really revolve on prudent logic. Rather, they are fired on speculation and fear. Brokers are haunted by the anxiety that competitors are onto something big, and they're missing out. So, when they spot a few folk having a punt on an unknown enterprise - particularly, if that's one of these 'social digital' operations - they jump in too. That easily becomes contagious, prompting still further suits to pile in, terrified the big bucks are about to pass them by. Before you know it, some chancer has an outfit worth $5billion on his hands. If you think that sounds nuts, it is. This is exactly how the first dot com crash happened. Infectious fear also brought the world to brink of total collapse in 2008. We're told the lessons from those catastrophes have been learned, but clearly they haven't. Not when the scent of fortune is in the air.

Clearly, investors are craving a new Twitter or Facebook and have instructed their people to maintain an eagle-eyed focus on the industry, lest such a phenomenon should happen along. For a couple of weeks, the market was convinced Introbiz fitted the bill perfectly. It didn't though. What's more, even Twitter and Facebook aren't reliably profitable - it's just that many rich people think they will be one day.

Now, you may imagine that the suspension of Infobiz shares means Mr. Kueber has missed the money boat. In fact, he is still a paper billionaire. The value of shares in his site haven't actually plummeted, they're just in stasis.

A quick look at the Infobiz site reveals you can buy an online introduction to Angelina Jolie for $50.00. Some fellow will also 'tell the story of your company' for $5000.00. Whether any of these prospects comes across as appealing, or even believable, is up to you. Nevertheless, it's worth pondering on the fact that the mere possibility this might take off, was enough to make one man an eye-watering paper fortune.

How's that for a pitch?         

Magnus Shaw is a blogger, copywriter and consultant

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On Creativepool

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