Welcome to Internet Bubble 2.0

[mandy]

Haven't we seen this movie before?

Cash-rich company offers more than $1 billion for a Silicon Valley Internet company with no profit started by 20-somethings backed by a blue-chip venture firm. The deal is blessed by any number of industry analysts, including Henry Blodgett, while competitors scramble to strike similar deals lest they get left in the dust.

Welcome to Internet Bubble 2.0. It began modestly last year with eBay's purchase of Skype, the Internet phone pioneer, for $2.6 billion. It gained speed with Rupert Murdoch's purchase of MySpace, a social networking site, for $580 million. And it shifted into high gear last week with Google's $1.65 billion purchase of YouTube, a video-sharing site that shows more than 100 million video clips each day. No sooner had Google's latest purchase been announced than Yahoo stepped up its campaign to snag Facebook, the networking site favored by college and high school students, whose 22-year-old founder has reportedly turned up his nose at a previous billion-dollar offer....

full article: http://www.washingtonpost.com/wp-dyn/con...00092.html

[thentavius]

Blehh.

[mandy]

Is 'Web 2.0' Another Bubble?

Yes.

Hundreds of Internet companies have emerged since the dot-com crash, looking to capitalize on a resurgent online advertising market. Companies in this new wave -- known as Web 2.0 -- have focused on online collaboration and sharing among users. They hope to attract millions of users and become the next YouTube, which was acquired by Google Inc. earlier this year for $1.65 billion.

Venture capitalists, who fueled the previous Internet bubble, are pumping money into the new crop of Web startups. In the first nine months of 2006, VCs sunk $455 million into Web 2.0 companies...

There were no blockbuster Internet IPOs and just one Web deal (Google's purchase of YouTube) valued at more than $1 billion in the past year. But the flood of money and flurry of activity prompts the question: Is Web 2.0 another bubble or are the startups getting funded today more sound than ones created in the run-up to the last bust?...

full article: http://online.wsj.com/public/article/SB1...?mod=blogs

[mandy]

A related article: 6 signs we're in a bubble

# 1. Increased recruitment
# 2. Everyone has a new business card-- again
# 3. Rebirth of startups for good, not evil
# 4. Groupthink in action
# 5. The year of the internet candidate
# 6. Difficulty hiring

For those of us who weathered the first economic implosion of the internet and ad spending in 2001, there is that lurking fear in the back of our heads: Are we doing it again? Has the new generation of internet evangelists not learned from our mistakes? Does the world really need yet another online calendar company that just got funded by venture capitalists?...

full article: http://imediaconnection.com/content/13646.asp

[rose]

[quote author=mandy link=topic=5502.msg44114#msg44114 date=1171797685]
A related article: 6 signs we're in a bubble

# 1. Increased recruitment
# 2. Everyone has a new business card-- again
# 3. Rebirth of startups for good, not evil
# 4. Groupthink in action
# 5. The year of the internet candidate
# 6. Difficulty hiring

[/quote]

# 7. San Francisco real estate prices

[Kristijntje]

Another related article:

From Wall St to Silicon Valley, experienced finanical types and entrepreneurs are privately conceding the obvious: we're in a tech bubble. The only doubts are over whether we are in 1998 or 1999 again.

Certainly, we're in the middle of one the longest running bull markets for sometime. Just three of the past 15 bull markets have lasted longer than five years - we're currently at year 4.5. Others are not quite sure where we are, or are in plain denial...

full article: http://www.theregister.co.uk/2007/06/01/...ch_bubble/

[mandy]

A related article:

Every single person working in the media today who experienced the dot-com bubble in 1999 to 2000 believes that we are going through the exact same process and can expect the exact same results—a bust. It's déjà vu all over again. And since this moment in time is only the beginning of the cycle, the best nuttiness has yet to emerge. Nevertheless, this is not to say that a lot of nuttiness hasn't already happened...

Each succeeding bubble has been worse than its predecessor. Thus nobody is actually able to spot the cycle, since it just looks like a continuum. I can assure you that after this next collapse, nobody will think of the dot-com bubble as anything other than a prelude...

full article: http://www.pcmag.com/article2/0,1895,2164136,00.asp

[Kristijntje]

More bubble sightings:

The Federal Reserve monitors things like inventory levels and housing starts to gauge the economy's direction. In Silicon Valley, old-timers have some leading indicators of their own.

The goofy-names index, for example, is back near its previous high. Consider Orgoo Inc., which helps people organize all their Web communications. Or Zipidee Inc., a purveyor of "digital goods" such as cellphone ring tones. "Are these names of dogs or are they names of companies?" asks Kate Mitchell, a venture capitalist in Foster City, Calif.

The rate of odd-looking start-ups, too, is on the rise. One called Startup Schwag exists solely to deliver a monthly package of T-shirts and other goodies bearing logos of other tech start-ups. Rapper MC Hammer, known for 1990s hits like "U Can't Touch This" and a 1996 bankruptcy filing, is chief strategy officer of an online-video start-up called DanceJam. PlaySpan Inc., a Web-gaming outfit that raised $6.5 million, boasted on its Web site that it had been founded by a fifth-grader...

full article: http://online.wsj.com/article/SB119189215196852951.html