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Dot-Com Bubble v2.0?
eldavojohn wonders: "With the recent acquisition of YouTube by Google, there has been a lot of speculation (on both Slashdot & The Toronto Star) that we are nearing the second economic bubble created largely in part by growth in the digital sector. While one may be able to debate that the revenue from advertising and sales can indeed back this growth, are we headed towards the second bubble and, if so, how hard is it going to pop? Keep in mind that popular voodoo economic theory has attributed the first bubble phenomenon to 'a combination of rapidly increasing stock prices, individual speculation in stocks, and widely available venture capital.' I think we're experiencing all those, although it is not as flagrant as it was during the first bubble. What do you think?"
Last time, it was mostly companies going public. This time, it's companies heavily funded with venture capital, and the companies are then bought by other companies.
But it's definitely a bubble. Way too many companies are chasing the same pool of advertising money.
And, unlike Bubble 1.0, most of these new companies don't really do very much. Or even stuff that hasn't been done before.
As I wrote in another article, "social networking" sites have a life cycle. EZboard peaked mid 2003. Nerve peaked early 2002. Bondage.com peaked mid-2003. Tribe peaked early 2006. Xianz (the "Christian Myspace") peaked in spring 2006. Friendster peaked twice, once in late 2005 and again in mid-2006, but that's an unusual pattern. Usually, once they peak, it's downhill after that. Myspace has flattened and looks like it's about to peak. This works just like nightclubs; they become hot, they grow, they get too popular, they get overrun, they decline, they hang on, but nobody cares.
YouTube is terribly vunerable to the RIAA. Once somebody builds a tool to check audio on YouTube against RIAA licensed material, they're going to get notice-and-takedown orders by the ton.
We're really straight in the middle of the second bubble. Its different than the first in a way, mind you, but a lot of companies have while projects and dreams thanks to the "newfound" power of information technologies (like all the web 2.0 crap). Some work, many don't, and honestly, I don't see how long they'll be able to stay afloat pumping all that money in these projects. Just as an anecdotal reference: I put my resume on Monster 2 weeks ago. I only have an associate degree, and a few years experience in .NET and Ajax. I did not apply -anywhere-. Yet, since I put my resume up, I have gotten at least 2 interview offers per -day- (not counting weekends) for so called "Web 2.0" projects of all kinds, all wilders one than the next.
They provided a seemless entertainment through video at a time when TV cost too much, and movies were not all that great for the money. By over supplying a high demand they catapulted themselves into the checks and balances situation where they are now in. They beat both TV and movies and bittorrent to the fruit punch, the sweet spot so to speak. Instant on TV like entertainment that was both creative and more down to earth. Its like jackass streaming in real time almost. Its not pay per view but in the future if internet on demand takes off aka higher quality internet to compete with cable and microsoft, youtube will have to go the way of napster and netflix perhaps.
Far out man -Chong
In a hyperinflationary depression the economy reaches a point where investors won't invest in businesses, so they then put all their money into commodities. This causes commodities to skyrocket, unemployment to go up, and pay to be pressured down. So everything goes up in price except for pay and profit. That makes the defaults on debt worse, makes the drive to commodities even more, causing a vicious circle. This happened in the late 70's in the US and we were able to break out of it by offering 21% interest on bonds to get investors to stop dumping cash. But this time a 21% prime will rip the US economy to shreds. BTW, over the last 5 years commodities have trippled while pay has done nearly nothing.
When I first went to intern with the company I'm working for now, they accidentally gave me an $800 Steelcase chair reserved for full-time senior engineers. They felt bad about the mistake, so they let me have it for the entire summer.
That very winter, I came back to to a project for them, only to find a cheap POS "executive office chair" at my desk. Yes, it was leather; yes, it was very flashy looking and fit well with my pressboard laminate desk -- but it wasn't very comfortable to sit in.
After four weeks of working 12-16 hours a day sitting in that damned chair (what, I didn't mention this was a tech job?) my spine was twisted in knots, my neck ached constantly, and my elbows hurt persistently. My productivity dropped essentially to 0, I had to see a chiropractor on a weekly basis and I chose to work from a noisy dorm room most of the time rather than deal with that chair.
Eventually, I took up the issue with the HR department who instantly caved and gave me back my fancy Steelcase chair. To them, $800 is a huge bargain when you consider the cost of disability payments, surgery to alleviate carpal tunnel synrome, etc.
I've had that chair for four years running now; I don't work quite as hard now as I did that first winter, but I haven't had a single back complaint, I'm free of carpal tunnel syndrome despite being a constant keyboard user, and I'm rarely the worse for wear despite spending all day in this chair, five days a week.
As a software developer, your chair, desk, keyboard and mouse are the physical tools of your trade. A carpenter doesn't skimp on his hammer; an assassin doesn't carry around a water gun. Why should *you* suffer with inferior tools?