The next internet bust?

[BeefyChong]

I miss Bubble Bobble.

 

[Andrew]

In the first internet boom there was very few sustainable business models. Even Google back then was not sustainable until they discovered Adwords from Sprinks and Overture.

Yahoo back then was worth more than General Electric and Yahoo had never, repeat never made a profit.

There is at least some consideration of profit now. And I feel like the widespead broadband, video, and mobile stuff is just starting in the last year or so.

A lot of people seem to take an all or nothing attitude towards this. Rather, when there is a market correction its those that are over-leveraged or reliant on external funding that get taken out. When things tighten up it becomes very obvious who is naked and who isn't.

John Dvorak has been around for a long time. For the most part, he's right. Today there are a lot of companies chasing after the hottest trends. When companies are getting purchased for multi-billions it is very easy for venture capitalists and entrepreneurs to throw millions of dollars at money losers. I recently got some data for a company I was sending leads to. The amount they were spending per actual conversion was staggering, and they still want me to send them leads. There are plenty of signs that we are entering the later stages of the business cycle.

As long as your profit margins are wide and your long term liabilities are coverable we could have the next great depression and things would be just fine. Bubbles happen and there is nothing wrong with them. Hell, there were plenty of people raking in millions while the last bubble fell apart.

 

[eggbert]

Dvorak is completely wrong here as he is wrong about most things. He is an old toad who has almost never made any correct predictions and cant form a single coherent piece of analysis and is probably exhibiting symptoms of early-onset Alzheimer’s.

For one, web 2.0 isn’t a bubble because in order for it to be a bubble it would have to draw in much more capital. The original web 2.0 bubble drew in BILLIONS of dollars from millions of investors. This included retail investor with etrade accounts to VC firms. This isn’t the case with web 2.0.

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