It won't have escaped your notice: my Facebook profile is going public in May! Just like yours and almost 850 million other Facebookers. The Facebook IPO will undoubtedly be accompanied by the question of whether there is a new internet bubble. Especially after a year in which Zynga, LinkedIn and Groupon also stormed Wall Street - with varying degrees of success. I cannot answer the question of whether there is a new internet bubble in this article.
A beautiful bubble doesn't have to be ugly
In the article 'This Tech Bubble is Different' Ashlee Vance describes the major shortcoming of the current investment frenzy, which is being exploited in internet companies that thrive on social networks and advertising. The central brother cell phone list point Vance makes is that when this bubble bursts - Vance believes it is a bubble - nothing of substance will remain. Or, as a former Facebook employee puts it in the article:
“The best minds of my generation are thinking about how to make people click ads […] That sucks.”
Vance draws a comparison with two previous IT booms; in the 1980s (with the rise of companies such as Microsoft, Sun and Oracle) and around the turn of the millennium. Although these periods also saw a lot of money being thrown around and a lot of money evaporating into thin air, they ultimately produced fundamental technologies: first the introduction of the PC and then a broadband Internet infrastructure. These technologies in turn proved to be the breeding ground for other companies to come up with new innovative products and services. The concern is that when the current generation of social networking companies implodes, there will be little left and all the talent and money that was available will have essentially yielded nothing for other companies to build on.