Can you say “American Peso”?

Interesting bit on TechCrunch this morning about an issue that has been much in my mind recently: the steep plummet in the value of the US dollar in the international market.

Setting aside all the fears (which I hope are overblown) about a global currency meltdown fueled by the massive US budget deficit and subprime mortgage madness, it’s interesting to get another, more granular view, of what the effects of the slump are.

They say that the big guys – Google, Yahoo, etc. – are all making killings because the rise in foreign advertising and Adsense is boosting their stock values and fattening their coffers here in the U.S. Hard to believe that 48% of Google’s revenues are coming from outside the U.S. – the world is catching up with us even quicker than the paranoid xenophobic analysts feared.  Also, they say that foreign startups are finding it easier to compete with US companies, because it’s dirt-cheap (in their currencies) to set up shop.

On the other hand…


US Startups

Although many are focused on the US market alone, smart startups
know that there are markets beyond the US-Canadian border that provide
growth opportunities that may not be available domestically in the
highly competitive US market. The cost of opening foreign offices is
becoming expensive as the dollar dives, and even basic stuff like
outsourcing coding (which many startups do to India) is now becoming
more expensive.

Anyone with a US Dollar exposure

Affiliates, bloggers and even coders are seeing income reduced as
the value of the US Dollar drops. Much (or most) of the content and
coding marketplace is run in US Dollars, which exposes bloggers who
rely on programs such as Adsense, through to people writing for blog
networks and similar writing positions.

Since I’m spending so much time overseas these days (doing my humble little part to reverse the great US Current Account Trade Deficit), the exchange rates and getting paid in foreign coin is back to a position of prominence on my personal financial radar screen. If what some of the bankers are muttering comes to pass, and we see what they euphemistically call a “correct” in the banking sectors, what will that mean for Web 2.0 workers?  If the dollar drops to .30 of a Euro (which would be another 50% devaluation – which some people are predicting by the end of ’08), will it be easy for European media companies to come into the U.S. market and buy up, say, Viacom.  Or AOL/Time-Warner.  Or Scripps-Howard?

And would that be all bad?

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