Slashdot Mirror
The New Boom
DarkClown writes "Wired is running a piece discussing the recovery from the burst Bubble in Silicon Valley. This time, though, it's no Bubble: it's a Boom. They suggest that this latest boom, fueled by Google's ascent, is under steadier footing than last time. Technology and the market seems to be catching up to the hype." From the article: "A boom perhaps, but not (phew!) a bubble. There's a difference. Bubbles are inflated with hot air and speculation. They end with a wet pop, leaving behind messy splatters. Booms, on the other hand, tend to have strong foundations and gentle conclusions. Bubbles can be good: They spark a huge amount of investment that can make things easier for the next generation, even as they bankrupt the current one. But booms - with their more rational allocation of capital - are better. The problem is that exuberance can make it hard to tell one from the other."
Regardless of how much firmer the the base is this time, the earnings and earnings prospects are both so very low compared to stock value. So at some point in future there WILL be a correction.
No, people are not saying there is a tech boom because of Google but because technology and engineers are now becoming important. Note:
There was NO tech boom in the late nineties and early 2000s
There was, however, a marketing boom.
Apart from a handful of innovations, there wasn't much that was technically new in the late 90s. There was just a lot of men in suits selling stuff like dog food online and a bunch of credulous investors willing to risk their life savings.
--- "We've always been at war with Eastasia."
I remember when Wired reported on this back in the late 90's. They referred to the past few years and next few years as "The Long Boom". I don't think it (the economy) was referred to a bubble until after it had burst. http://www.wired.com/wired/archive/5.07/longboom.h tml