Slashdot Mirror
Web 2.0 Bubble May Be Worst Burst Yet
athloi writes with a link to an editorial by John Dvorak over at the PC Magazine site. Rather than his usual tilting at windmills, Dvorak turns his attention to possibility of another big internet economy 'pop': "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. 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." It certainly seems like another burst is imminent; will this one be worse than the original, or have less of an impact?
Dvorak is crying that the sky is falling; so, based on his track record, everything must be just peachy then.
Good.
Simon.
Physicists get Hadrons!
Dvorak important and relevant? I think not.
Is there a way to put a -1 against a certain "Story writer"? I dont care if Bonk.. er Zonk or whoever puts it here...
zzz = Dvorak
"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."
The first sentence of the article and the first blatantly incorrect statement. Is it worth reading on?
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
People get giddy with their money and spend it foolishly, yes; however, this time around I think it's a bit different. People within the top tier of sites are actually making money, creating business plans, etc. Services that are offered are actually useful and when they aren't, they get eaten.
It's not like the 90's where anyone with a basic idea and a BS/BA degree could get venture capital to start up "the next best thing". Most of those companies died out, and people are more cautious with their money. Most of the new companies and ones who survived are service related. Those can live on, and whether it's AJAX or the next big tech, it doesnt matter. If you fill a real niche and make a solid product you will survive. If you're a new company living in an AJAX web 2.0 dream thinking you're cool, and hiding behind some pretty effects but no real substance you're in for a long trip. This is true for any business.
I would look into this - is it as crazy as it was back then? I don't see many IPO's with paper millionairs appearing overnight and going bust just as fast. Nor I see many massive hiring of naive and unskilled workers with inflated salaries. I'm sure the latter is still happening but I don't see it on the scale we saw in the 90's. So if there's a bust - I don't think it'll have a big impact as it did back then. I could be wrong though.
Shouldn't this article be linked under FUD in wikipedia?
It could happen. It may even happen. But acting like a mother and predicting every possible failure or catastrophe that can happen and when one of them does saying "Look I was right" only works on kids.
He's taking a whole load of independent businesses that happen to use more modern web protocols and formats (because they can) and using the common element of the web protocols they use to label it a bubble.
Laughable.
Evil people are out to get you.
We may have a certain percentage of Web 2.0 companies tanking soon, but we have not had a stock market run-up like in 1999-2000. So no, the impact of a forthcoming "burst" won't be nearly as bad.
War on Terror 2.0
Coming to a Mall near you!
Maybe its just from the perspective of being in Michigan, where we are still in the middle of a recession, but I am personally seeing the 2.0 bubble just starting to grow here. I sure as hell hope it isn't about to burst. My gut tells me its still leading edge of the growth curve.
Armaments, 2-9-21 And Saint Attila raised the hand grenade up on high, saying, 'O Lord, bless this Thy hand grenade' N
Any trained economist will tell you that markets that rise fast fall fast.
Its the same thing thats going on in China right now. The economy is exploding at a rate that investors feel is too risky and too volatile. Investors will begin to scale back their positions in the market and this will drive others to scale back as well.
If Web 2.0 is the great thing, I'm waiting for 2.1. Never buy a dot zero product. Huge housing boom, about to crater very big. Makes the collapse of the late 80s look like nothing. Huge internet boom, about to crater very big. Makes the collapse of 2001 look like nothing. But I learned my lesson. My HP stock is back to about where it was in 1999. My Agilent stock is about 60%. My firstbuy.com stock makes for pretty wallpaper (but at least it covered some capital gains). My Netrix stock is worthless, and I don't even have the paper to hang on the wall. And it was in my IRA. This time around we didn't buy into any of that crap.
Dvorak seems to have a job despite all logic.
Monstar L
There have been many lessons learned since the last bubble. This time around, investors want to see real business plans, and there's got to be a plausible way of actually making some money. Perhaps more importantly, they're putting actual business-savvy people in charge this time around.
This isn't 1999, where a twentysomething with a web site could land millions of dollars of funding for a web site whose biggest feature was that it was on the web, and then get put in charge of the company, spend the money on Aeron chairs and foozball tables, and run the company into the ground.
Tired of FB/Google censorship? Visit UNCENSORED!
is not the single economic system facing a crash on the horizon.
Evolve, damn you!
I think some companies in this current era of the web are a bit over valued. (Google in particular comes to mind) Its likely that at some point, the market will correct that. But in general, companies are much more stable and substantive than they were in the late 90's.
In America we are imprisoned by our fear of them.
Because it's Dvorak saying it, it must be false, but then even a blind squirrel finds a nut now and then. I'm almost sure of this -- there's been such worship at the altar of Web 2.0 that people have not been noticing the river rising outside their windows. Web 2.0 has been touted as the next coming, but along with the positive gains there have been the inherent flaws and security problems. Pile on top of that the general low quality of programming nowadays and one has to ask how long before it does happen. Dvorak is not the sharpest tack in the box much of the time, but he has picked up on trends which would be apparent to anyone if they were looking. As to me, I'm going to start building my ark.
GetOuttaMySpace - The Anti-Social Network
NUMBER 3 DATA. CHOOSE THE THIRD OPTION...
Anyone who doesn't recognize this deserves to die!
Huh? Has anyone ever taken the Web 2.0 "hype" seriously?
From TFA:
Yeah, I keep my music CD's and software CD's in the same box as my Pets.com stock.
He's an idiot, paid by the page hit.
From the end of TFA: "You can come up with your own theories about the next collapse. Your guess as to the cause will be as good as mine. All I can tell you is that it's a sure thing."
If that isn't FUD, I don't know what is.
In 1999, how many companies were there that were publicly traded, had market capitalizations in the billions, and had never made a dime? How many Supwer Bowl ads were there in 1999 for massively unprofitable companies?
Contrast that with the current situation. There is probably some degree of overspeculation, particularly in the housing market, and this will take some time to correct. But to see a massive crash of companies built up by VC pump-n-dump...no. That's not to say there can't be a crash, but it won't be for the same reason as 1999.
I'll worry when a sock puppet hawks pet food on a superbowl commercial or when some company tries to create a business model around delivering groceries to consumers from a van.
- real hackers don't have sigs -
The first .com thing was called a bubble by many economists and business people from the get go and it clearly was. I remember my roommate (who was a business major) joking about how we should start a business. We'd have no business plan and no way to make money, offering something worthless. We'd lose a ton of money first quarter and just cut costs every quarter after that. Stock prices shoot up on the "growth" (less loss was huge growth for .coms) and we get out like madmen, well, minus the whole securities fraud thing.
.com bubble if there is one. If I was to pick something to be concerned about it would be the real estate market as there as a good number of ARM mortgages that are going to be resetting in rate here soon and values in most areas are not rising much if at all.
The problem was people were just throwing their money in to startups that had no fucking clue what they were doing. Many were offering something totally worthless (Cuecat), many had no plans for how they'd actually make any money since their whole business was giving shit away for free, many just pissed money away on parties and such.
Well I don't see that happening right now. Maybe it is and I've just missed it, but I do kind of keep an ear on these sort of things. If people have been unreasonably throwing money in to anything it has been housing, and at least that's a market where you are purchasing a real property with real value (though that doesn't mean you can't overpay). Sure there's still investment in online technology but that doesn't make it a bubble of any sort. There are plenty of successful online businesses. Google is a great example. While their stock is surely overvalued, there is no question that they are a profitable company and face no danger of going out of business should it drop. They are propped up by a solid positive cash flow, not a stock bubble.
I don't claim to be an economist or anything, but I really am missing the
Stock bubbles are the result of speculation. Speculation is when people buy companies with incredibly high SharePrice/EarningsPerShare (P/E) ratios. For a mature company, this number is typically around 15, meaning if earnings stay the same, and all earnings are paid as dividends, over a 15 year period, you would not lose money even if the share price went to 0. For expanding companies, P/Es can typically be as high as 40.
In the bubble, investors were buying shares with very high prices despite very little earnings. The Nasdaq currently has an average P/E 24.01, which is reasonable if some companies are mature and some are in a high-growth state.
And... since when was Dvorak a market analyst? I thought he was just a troll who posted absurd comments in order to draw readers...
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
That's funny, I just read an interview with Cringely where he said we are decidedly not in a bubble because all the big web companies are actually making profits. If you're turning a profit, it's not a bubble, he says. Hmmm, who to believe, Dvorak or Cringely...
In order for the bubble to burst, you have to have a price bubble in the first place. Whither the inflated Web 2.0 company stock values? Most of them haven't even IPO'd because of SarBox. Venture capitalists pissing their money away on craptacular Web 2.0 companies isn't the same thing as the inflated stock pricing on Internet companies and the resulting massive correction afterwards.
Companies come and companies go. It's a fact of life. It doesn't make them going out of business a bubble bursting.
Dvorak talks about a "CD-ROM bubble." Now, I've been around for a while, and I thought I would remember any major deflation of a market such as what happened in the dot-com bubble, but what the hell is he talking about? Ditto pad computing, I must have missed all the hype about that. I do remember word processor "wars," so to speak, but even that is questionable. As far as I recall, WordPerfect led the market for years and years, then Microsoft Word came along and cleaned its clock. Yes, there were some minor players, but seriously, when they went out of business over the years, was it really a bubble bursting? Was there really a PC clone bubble that burst? I remember two-inch thick Computer Shopper magazines with dozens and dozens of company, and over the course of time they all were either bought up or folded, but was it really a bubble bursting?
The thing that made the dot-com bubble unique was that it affected damn near every corner of the industry, even industries that had hardly anything to do with dot-coms, and seemingly all at the same time, around 2000 to 2002. Most of Dvorak's other examples were companies coming and going as they always have and always will.
As for the future, it's hard to say. There will undoubtedly be market normalization for companies that are overpriced right now, but I seriously doubt that so many people are going to be affected all at once like they were in that 2000 to 2002 timeframe.
In other words, companies will come, and companies will go. It's not major crisis, and no reason to panic.
His evidence list is a joke. First off if the social networking sites collapse, how bad will that be for the industry? Secondly, if the you-tube clones fail, how bad will that be? The rest of the evidence is really not much about collapse, just a bunch of bitches about likely project failures. The quote "the iPhone mania may be a bad sign of something" is priceless.
Summary:
John vents his spleen in a rambling manner, inflates the headline to something about industry collapse and slashdot reports it as news.
I used to wonder what was so holy about a silent night, now I have a child.
I can't tell you the number of times I've stared in amazement at this latest crop of Web 2.0 startups that look, smell and sound exactly like their Web 1.0 counterparts. The basic underlying problems of generating critical mass, ad revenue, and basic business model stupidity haven't changed. The insane multiples that go into valuations haven't changed either: Consider that most brick and mortar businesses are valued at a small multiple (if any) of annual revenues, but web companies are still valued at a ridiculous 15x - 20x multiple despite their hilariously grim prognosis for survival. And the revenue strategy still seems to be "Selling the whole shebang" rather than "Earnings" (remember "earnings"?), and the vast majority of ideas don't seem to be new, or remotely defensible against competition (Barring of course absurd claims of intellectual property and patents).
If this isn't a bubble I don't know what is.
But then again, there's a sucker born every minute.
I have a killer dot-com business plan (Web 2.0, of course) if any venture capitalists want to give me a call.
------ The best brain training is now totally free : )
If you believe anything that comes out of his cloaca, I've got a bridge to sell you...
Once again, Dvorak doesn't know what is happening or what people are doing with the Web.
I have never met anyone as consistently wrong as Dvorak.
How he hangs onto his job is beyond me.
Then again, I think anything he would actually write for is probably Rupert Murdoch style fish wrapper.
Yeah, John C. tell me again how Apple should be chopped up and sold off to enhance share-holder value.
You stupid cunt. Blinkered, Phillistine pig ignoramous.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
...sucks as bad as the river tide.
http://www.theonion.com/content/node/51376
IMO, Web 1.0 was about what was on the internet (grocery shopping online, etc), Web 2.0 is about how things are on the internet (ie AJAX). Web 2.0 is primarily a maturing of what we already have. It's the result of bandwidth for the masses, new browser features due to the rejuvenation (thanks to Mozilla) of a stale market (thanks to Microsoft), PCs with lots of CPU cycles and RAM to spare, high resolution displays, and the fact that such a large percentage of society is online.
A lot of what he talks about in the article is copy-catting. Youtube is extremely popular, thus a lot of other copy-cat video sites are popping up, often targeting more specific markets that are less social in nature. Social networking and user-generated content is pretty much the same thing. When people get tired of it they will stop doing it. Big deal.
I really don't understand what bubble he's talking about that is going to burst. The sites that comprise the internet will come and go and change according to traffic. Just as fads, hair length and clothing styles come and go, so will various movements on the internet as it matures.
Dan East
Better known as 318230.
Once I saw it was Dvorak, all I read was "blah blah blah." I guess John got tired of writing articles to piss off Mac users and decided to try a bigger crowd...
Music - www.richardmac.com
The dot com bubble bursted because many companies were simply backed by investment money but failed to generate any significant revenue. As soon as the investors backed out, the companies worth were exposed to be close to zilch.
Since IANAE (economist) I can't really tell how it is this time, but just because a financial sector is growing doesn't mean that it is a bubble. (A bubble implies that the marked is just filled with air instead of real money.)
However, as we've seen through all modern history, stock markets will crash time and time again.
When businesses have been given the final piece in acquiring Divine Right over their workers (as opposed to the opinion of some), it's not surprising to see a continued recession in the Rust Belt.
Something that would help would be to stop the attack on unions, close the various immigration related loopholes(H1B included), and allow universal - not competitive - access to higher education (that does not penalize citizens, but favors them over immigrants).
If we cannot take care of our own, why insist on penalizing those whom have citizenship and are not a protected class (such as a business)?
By 'Bubble' I assumed he was referring to the Nasdaq's collapse back in early 2000. (At its current level, it needs 100% return to get back to those levels).
His article has nothign to do with the traditional understanding of what a "bubble" is, espeically when referring to the tech 'bubble' of the late 90's.
If somehow he is referring to the tech bubble in the financial sense, there is no 'Tech Bubble 2.0'. Why? Well, Yahoo, like most other tech stocks at the time, was trading at over 1700 P/E at one point in the late 90's. In other words, based on its earnings at the time, it would have taken 1,700 years for it to make the amount of money its stock was worth. Yahoo is currently trading at a P/E of 46. In fact, most stocks now are trading at fairly conservative P/E ratios as compared to historical ratios.
You wanna see a tech stock with a high P/E in modern day society? Check out ticker symbol: CRM. Luckily, in the grand scheme of things, this is just an outlier.
the act of prognostication, or calling it out, will almost certainly ensure that it doesn't happen (burst) as it will raise awareness and limit investment.
There is an absurd amount of doom and gloom in the markets surrounding the sub prime fallout and it's impact on the housing and financial sectors.
When everyone shouts "the sky is falling", it's time to step back and look for bargains. The opposite is true--when everyone cries out in victory over the awesome performance of their stocks, it's time to look at your best performers and see whether their price is still justified. Many stocks are declining for no good reason since they have little or nothing to do with sub prime loans or housing. We are nowhere near the speculation levels that occurred during the last bubble.
Tech always seemed a bit pricey of a place to put your money to me. Wouldn't be surprised at a correction--but a collapse? I doubt it.
Since the wikipedia clearly says FUD is a markteting strategy the answer would be.... No.
People often seem to mistake FUD with 'nonsense' and although spreading nonsense is usually part of a FUD campaign it's the goal of spreading the nonsense that that makes it FUD.
When I saw that it was an editorial by Dvorak I just moved on and did not RTFA. I did, however, waste a few minutes of my time to come here just to say that. :)
If I didn't have absolutely NOTHING to do, I wouldn't be here.
Today, I know of experienced people working crappy first level support jobs simply because there isn't much else out there. While things are far better than they were in the early 00's, they still aren't all that great and are far short of the bubble in the nineties.
...when the tubes are clogged.
During The Great Bubble the numbers predicting the pop were glaringly obvious. I recall many financial articles predicting the demise of EToys, Pets.com, Webvan, etc. And the believers dismissed the analysis as "old economy" and people who "didn't get it". The new economy was based on "eyeballs", "stickyness", etc. Not profit vs. loss. It was a whacked time. It was The Great Bubble.
Show me the numbers now. What bubble? Sure there's web 2.0 hype. Google, the leader of web2.0 is profitable. Maybe overvalued, who knows. And yahoo too. Also protifable. And amazon. And myspace and linkedin and facebook, all the posterchildren of web 2.0, are all financially sound even if they aren't all profitable.
So show me the numbers that indicate a bubble on the scale of The Great Bubble.
Dvorak really is a wind bag. Too bad Slashdot with its human editors can't at least compete with Digg and prevent this kind of drivel making it to the front page.
...it never happened
Why does this guy even have a job predicting tech trends? If I could fill one bucket with everything Dvorak gets right and the other bucket with shit, I can guarantee you I know which bucket will fill up first.
So what does Dvorak say? The current bubble, already called Bubble 2.0 to mock the Web 2.0 moniker, is harder to pin down insofar as a primary destructive theme is concerned. A number of unique initiatives, however, are in play here. Let's look at a few of the top ideas floating the new bubble.
Neo-social networking. Today everything from YouTube to the local church has a social-networking angle. And this doesn't even consider the actual social-networking sites, from MySpace to LinkedIn to Facebook to even Second Life. This scene is totally out of control and will contribute to the collapse for sure. MySpace was purchased by fox for a somewhat excessive sum, but that's already happened. Facebook's owners reportedly want two billion dollars for the company, but no-one has paid them that. So from this category I see one company, facebook, and it isn't even publicly traded. Video mania. With dozens and dozens of YouTube clones cropping up to get on the "throw money away" bandwagon, you must sense that the eventual shakeout in this space will have a negative impact. Youtube was a rather expensive purchase for Google and it's hard to see where the payback is, but that's already happened. I can't really think of any competitors anyone is likely to invest in... google video, perhaps, but that's owned by Google anyway. User-generated content. This idea has been around since Usenet and just keeps improving. It will make no contribution to the overall collapse except for users reporting the collapse. "This part of the bubble is not part of the bubble"?? Mobile everything. Here is another concept that has been in play since the mid-1990s. It cannot trigger a collapse since it will never fully get off the ground, although the iPhone mania may be a bad sign of something. Mobile what? Are mobile phones a bubble? Or is there a bubble of iPhones and iPhone-like-devices that I'm not aware of? Ad-leveraged search. Most search engines will fail as a matter of course. This segment of the industry is mundane. It would be affected by a crash but not trigger one. You mean Google? Widgets and toolbars. I cannot see the widget scene going crazy, and the jury is still out on toolbars. But there is the potential for nuttiness, I think. The problem here is that these things tend to be dependent on the stability of operating systems and browsers. One bad operating-system patch and suddenly nothing works. There's a "widget and toolbar" bubble? I don't know of any company built around selling "widgets and toolbars".
So, here's Dvorak's bubble of over-valued assets:
MySpace = fox
Facebook - privately owned
Youtube = google
Google
iPhone = apple
Or in other words, the best examples Dvorak has of the bubble of the late 90s repeating itself are:
Fox
Google
Apple
Facebook
Personally I don't agree with Dvorak's assessment that these companies are about to collapse (although it seems unlikely anyone would pay $2 billion for facebook).
Just my $0.02.
"Goodness me, how unlike the FBI to abuse the trust of the American public." -- The Onion
Every time I see Dvorak, I think "Finally! Another article on the Dvorak keyboard layout! Perhaps we'll gain a few more converts!". Alas, woe is me, for it's just another article from that talking garden gnome.
Confidental to editors: let him sink to the bottom with the rest of the slag.
Chris Knight is my hero.
Somehow I thought it was long ago established Dvorak's articles were better left unread. Why do they keep getting onto ./?
Why do people submit them? Anyway, here's my response to Dvorak's worthless article:
Dvorak makes an assumption that popular = thin membraned air filled structures. I submit this is not true. For example, automobiles, cell-phones, computers, internet access, coffee, potatoes, wheels and even including advertising... the list goes on. Some products have real human, social and economic value. So, let's look at Dvorak's criticism of 6 key areas of the current web-economy:
Neo-social networking: Facebook, myspace, youtube are perhaps the biggest three and they all generate revenue and are connected to stable companies. Theses are likely to fail when hotmail and gmail fail... i.e. never. People like them too much.
Video mania: As long as the MPAA and RIAA don't crush this, it will be around for at least as long as television. On demand video is every couch potatoes dream and with the addition of the social(personal) element, the hope that you might talk to that girl humiliating herself with her "sexy dance" makes it even more attractive. Video mania is here to stay.
User-generated content: I'm not quite sure how this is different than video mania, but I think he just wanted a bigger list.
Mobile everything: Again, this has been a constant success since the first Palm or laptop through every bubble he has mentioned. Mobility sells.
Ad-leveraged search: If this weren't a valid business model then television studios would have failed long ago. Advertising based revenue works, period.
Widgets and toolbars: The one thing that I truly hope users grow to hate! Either way, his FUD about bad patches extends beyond the web. If nothing works there are bigger problems than a dot-com bubble bursting. If one bad patch can take down the majority(51%) of users computers it would be an unprecedented patch/disaster. Nothing like this has ever happened and I doubt it will happen.
The question I have here is, why did Dvorak write a FUD article about the dot-com bubble? Perhaps he knew no one would heed it and if it doesn't happen the article fades into obscurity and Dvorak comes out unscathed for his stupidity. If he is right, he is labeled a prophet in our own time and maybe he'll get the obeisance he feels he is due.
That does not refer to the so-call Web 2.0 "bubble", but to the usual doomsday prognosticating crap that has been the bane of human existence.
Dvorak certainly benefits from all the attention he gets from his FUD, but he has no basis to declare this "Web 2.0 bubble."
Efforts to capitalize on the newest technology will always see an eventual shakeout, but to say this one will be worst than the last is blowing smoke, to say the least.
The last dot.com crash was pontificated by crazy boosts from Wall Street, where merely claiming you were "dot.com" attracted crazed investors. I was a day trader in those days, and have seen many shoot for the stars and drop into oblivion, sometimes in the space of a week or less.
That is truly NOT going on today.
So Dvorak wishes to be an alarmist. Fine. I think we can safely ignore his antics.
Ruby Neural Evolution of Augmenting Topologies
Sure Google's stock is way up there, and the price/earnings ratio is a little foolish on some of the brand name tech stocks, but go back and look at the stock charts. This time around, there is none of the obscene spiking that sends investors into a "buying panic." And without those heights to fall from we won't have a "selling panic." So the basic mechanics of a bubble in the investment sense are missing. Investors have mostly been thinking about commodities and uranium, and are generally wary of tech stocks after the dot bomb.
--
thegirlorthecar.com - a dating game for guys
-- http://thegirlorthecar.com funny dating game for guys
Why oh why did i read this article?
I read TFA. I don't think Dvorak appreciates the difference between the technology fads known as "bubbles" and the "bubbles" resulting from fiat money inflation and fractional reserve banking.
Remember the last time the bubble burst? Remember how all those crappy sites like Pets.com died, and how those overly optimistic .com start ups crash-and-burned because they didn't have a business model beyond 'lets just do what Amazon does'?
Remember how all the GOOD sites managed to survive, like... oh I don't know... Slashdot?
Now imagine all those crappy mySpace/Facebook imitation websites burning to the ground, all (or most of) those Digg-clone'Social Bookmarking' sites biting the dust, and all those YouTube wannabe's going bankrupt.
It's going to be awesome... until the dust settles and we start hearing people say 'Web 3.0' over and over again, thinking that there is NO WAY this Web bubble is going to burst like the last two!
"will this one be worse than the original, or have less of an impact?"
Before we can answer that question, you need to provide some specifics: The original dotbomb was bad because A, B, and C. This round will be worse because...
I worked for a (once large) web design firm during the first bust. I saw an ocean of twenty-somethings react in horror as a smug, arrogant sense of entitlement was stripped away from them. They'd grown up during a continuous economic boom, they'd learned a skill that you could teach your grandmother, and they thought they deserved huge salaries and touchy-feely perks.
During the last boom I not only kept my job, but I got to watch people I seriously disliked lose theirs, so for me the last bust was just fine.
Now if I were to get laid off this time around, this bust would be MUCH worse - for me.
Face it, predicting another dotBoom over the internet these days is about as silly as predicting another dotBoom over the CD-ROM. It's so ubiquitious that the growth isn't there in the sense that excites Wall Street.
There's not even Web 2.0 spike to begin with.... people building web apps are going to maybe use Web 2.0 or maybe not. The previous web boom was more about putting money into internet companies that were building out for the first time. This is a much more evolutionary technology.
For that matter, there's not even an all out browser war any more, just a gradual increase in the use of FireFox that only engages Microsoft's attention to throw tabs onto IE6 and call it IE7. Back in the Netscape day, Gates and Co were so po'd they made a really groundbreaking browser from a DOM scripting standpoint in IE4... and they spent a few good shillings to do so. Now, what do we get, tabs? Microsoft is too busy building x-boxes and table computers to care about PCs any more and even Vista is anti-climatic.
This is my sig.
If it gets people to stop saying Web 2.0, I'm all for it.
The thing that made the dot-com bubble unique was that it affected damn near every corner of the industry
It was insane. Unsustainable valuations that reminded me more of tulip bulb trading. Companies with absolutely no background in tech were opening up IT consulting branches. Yes, I'm looking at you KPM&G.
If anything what we're currently experiencing is a correction from an industry that was over-sold in the wake of the dot-com collapse in 2000 and then the outsourcing insanity that followed after. That was a double whammy that dried up the pipeline of IT students in college almost overnight.
It doesn't feel like tulip bulb trading this time. This is a correction and we're still playing catch up.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Okay, we have Second Life & WoW Terrorists, Smarter teens have less sex, Mouse or Trackball, No Demand for Linux in UK and now a dvorak article on Web 20 bubble about to blow. Is it just me, or does it feel like this is the tabloids at the grocery store and not slashdot... Sam
I was in SF then and am in SF now where there are quite a number of startups. If this is what the media really believes then they have no idea how crazy the dot.com bubble really was. It was a gold rush of epic proportions, people really did make 80k a year for knowing basic HTML. If you could string two sentences together and work Word you could be a project manager. If you knew three layers of the OSI and how to run tracert, you could be fast tracked to being an admin. Companies were desperate for people because everyone believe you had to ramp up customers *and* employees as fast as possible regardless of profitability.
The companies around now all have some veterans of the crash. What I see are people who are frugal, want to stay small, and aren't out to IPO as fast as possible. Many of these companies are trying to make their series A last as long as possible. During the boom companies were planning how to spend series C before even closing B... it was crazy, fun, exciting and a total disaster.
Here's a benchmark for how crazy SF was. Pretty much every company would reimburse most lunch and almost any taxi ride if you could come up with some loose business connection. There was such a wait for taxis downtown and SOMA that limo drivers from all over the bay would do extra day hours with a whole booklet of receipts from major taxi companies. You could take a limo pretty much anywhere in town for $10 flat with tip, $20 if it involved multiple stops or a short wait anywhere. This lead to you seeing kids fresh out of college, popping in and out of limos having $140 lunches at Aqua and such because it all came so easy. Everyone know it was a farce and was going to end soon (well everyone without an MBA or people who moved into town specifically for one of these crazy pie dreams). If I had to do it all over again, I would, because it was a fabulously good time on dumb people's money.
--- I do not moderate.
"The current bubble, already called Bubble 2.0 to mock the Web 2.0 moniker". Why is noone catching that he is not saying that Web 2.0 is going to burst? He is simply stealing the naming convention to describe the current (non-existent) "bubble". Despite this, his argument and reasoning are total nonsense IMHO. A CD-ROM Bubble? WTF kind of crack is he smoking when he spews this crap?
I think the media is focused on the wrong industry. Most people here would agree that internet-based companies today are much more solid and the sky isn't about to fall on the IT industry like it did earlier in the decade.
However, I do think there's a bust over the horizon, but just in another industry: entertainment. Think about the millions of dollars spent on producing video games, movies, and music. I'd argue that a push is happening among consumers away from expensive graphics-intense games (Nintendo Wii's success and PS 3's stumble), special effects-intense films (movies like Spiderman 3 are seeing rising production costs with falling profit margins), and one-hit-wonder artists' albums (iTunes' success is mostly due to the ability to purchase single tracks).
So what I would imagine we'll see in a few years isn't another IT-industry bust, but an entertainment-industry bust. When production costs start to creep really close to product sales, the industry is going to go nuts. This isn't a bad thing though. Just like the dot-com bust forced companies to stop rehashing ideas with a new face, an entertainment bust would force companies to actually produce novel content rather than making sequel after sequel.
You're right in that many of that the steps you mention (be union-friendly! stop immigration-fu!) would probably improve economic conditions for those in the Rust Belt, at least in the short run, but any such gains for people there will be countered by losses elsewhere in the economy - but that money doesn't come from nowhere. Perhaps you think it noble to extract the money out of some rich industrialist bogeyman's well-stuffed portfolio (and neglect what it's taking from little old ladies' retirement portfolios) and it may improve things in the short run, but in the long run that just means that the industrialists make their investments elsewhere (think Asia). I suppose you could try and restrict trade to counter that, too, but you'd be effectively making the entire country pay extra to support this section of the economy which (it has been demonstrated) they don't particularly need, and is becoming obsolete. Aside from robbing Peter to pay Paul, none of this really helps encourage the region's economy do what it will need to (restructure) in order to move into the future.
The World Wide Web is dying. Soon, we shall have only the Internet.
Get your tulips here!
fkdh od fjein fj do yes fowh4k of do ghrdr thogs thst gutrns ldo to be dofntks dwonf(((((
Keep your hands off my comments Dvorak!
> This isn't 1999, where a twentysomething with a web site could land millions of dollars of funding for a web site whose
... yeah it is
> biggest feature was that it was on the web, and then get put in charge of the company, spend the money on Aeron chairs
> and foozball tables, and run the company into the ground.
uh
There is a complete failure to do deeper analysis here. The dotcom bubble occurred because of the creation of a technology that could produce an immense competitive edge. That technology was the web-based storefront, which allowed companies to save immense amounts of money by not having to pay for a physical outlet for their products. What was then costing companies thousands to hundreds of thousands of dollars each year was becoming something that anyone with $35 and a little skill with HTML could set up in a week. There was a huge rush to be the first to grab a niche in this new environment, and poor understanding of the dynamics of that environment.
There is no such obvious competitive edge with Web 2.0. There wasn't anything near that kind of edge with CD-Roms. There certainly is not a flood of poorly informed investors willing to pour cash into anything that sounds vaguely marketable. Web 2.0 may be slightly over-invested, and the investors may suddenly realize that their new golden boy isn't as golden as they thought it was. Buzz words come and buzz words go, but nothing has had the all-pervasive influence of the birthing of the internet. We do not have insanely inflated stock values, and neither is there a huge glut of tech jobs.
I'm sorry, Mr. Dvorak, but I think that in this case you're leaping before you look.
Wake up - the future is arriving faster than you think.
What draws attention to Dvorak's writings? Negative, indulgent postulations like this from him. He's a masterful P.R. guru of his own work, promoting his thoughts while shouting from his soapbox.
/. and we're discussing it.
Well, it works. He got a link from
I think Web 2.0 technologies will continue to advance/fuel the next generation of web dynamics/apps. I don't think we're going to see a similar collapse any time soon either. Imho, many online retailers are thinking smarter about their web presences; it's no longer "I gotta have a web site!" (just to have one) but having solid business planning in place. And web developers may be going gonzo with their own web video companies, etc., but this isn't a retread of the former bubble burst.
What Dvorak FAILS to account for: Global economy changes. Increased Internet traffic means increased economic opportunities which fuel next gen web developments. (India and China are two obvious examples.) The "bubble burst" is going to stem from technology shifts to other countries, eliminating jobs on the U.S. front via outsourcing/cost cutting, impacting jobs, growth/innovation, the economy...
Wait... maybe Web 2.0 is a bubble waiting to burst...
Just not the way Dvorak is screaming about it.
If we provided universal, non-competitive access to higher education you would be in a classroom somewhere slowing everybody else down. If we let all the idiots in to colleges they aren't good enough to get in to the institution will be strained from all of the extra people and the quality will degrade. Also the classes will need to be dumbed down or the idiots will fail and they will have wasted their time and money when they could be making sandwhiches for the hungry masses.
But a lot of people may not get it.
Pining for the fjords
This time around, the bubble that's bursting isn't tech at all. In fact, look at the stock market the past few days: everything down, tech up. Web 2.0 won't be bursting anytime soon, if at all.
The HOUSING market and mortgage industry, however... hooooooooo boy, that sector is bursting as we speak, and it just keeps getting worse. Tech will likely be the only thing that doesn't fall completely apart in the next 6 months, frankly.
Don't Crease the Weasel!
He invested all his savings in tulip bulbs.
You are reading a copy of my copyrighted post.
Uh.. unfourtunately thats not true and I do think sometime in the near future (12-24 months...) at least some degree of recession will take palec. However, Until then me and my partner who is also 21 years old, just got 4 million in venture capital for our website. No joke.
'Cause I don't believe he's been right since Kilobaud Microcomputing closed it's doors, and Byte started taking up the marketplace.
Has he ever been right? Do catastrophes _ever_ come with a warning? What would we do if we had one?
--- For a good time mail uce@ftc.gov
Because Google doesn't rely on it. The .coms closed down when their stock went down because they made no money. All their income was from investment, so when the stock tanked, they had no investment thus no money to continue operations. Looking at their balance sheet I see a yearly profit in the billions, $12 Billion in cash on the books and no debt. That means that even if their stock tanks, they've got no problems paying the bills. They'd lack as much money to invest in new projects, but they sure as hell aren't going anywhere.
Look, there's nothing stopping people from submitting Dvorak articles but something can be done about whether or not they're posted! How many other interesting articles got left in the firehouse while this jackass makes the front page?
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
Information roadmap.
1) Control transmission medium
2) Control transmission protocol
3) Control transmission services
4) Loop
I think the Google/wireless situation indicates we're getting ready to enter step 4 again.
Apple jumped the gun with the iPhone, whoever jumps the gun on mobile services will win this round.
Wanna fight ? Bend over, stick your head up your ass, and fight for air.
I've been working in this biz for something like 30 years now - there's a continued 5-7 year up/down cycle or which the .com boom/bust was just one example - crying "the sky is falling" without adding "yet again" is a bit silly
Actually, there are lots of reasons for believing that despite appearances all of these companies are undervalued and would be worth buying at two, three, maybe four times their current stock price. I personally believe everything Glassman and Hassett wrote in "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market." They had it right, it's just going to take a little longer.
See, It's what's technically called a paradigm shift. None of the old rules apply. The secret to wealth without work has actually been found this time. It's as sound as tulips, international postal reply coupons, and Florida real estate.
Buddy, can you s'paradigm?
"How to Do Nothing," kids activities, back in print!
...that web 2.0 companies are making money. They're not just airy fairy exercises in giving everything away forever. Flickr sold pro-accounts, for example, and huge numbers of people bought them even before Yahoo acquired the company. I bought one, and got much enjoyment out of it.
There are some oddities out there that get lots of press for no discernible reason (twitter comes to mind), but most of the so-called 2.0 companies are solid companies with ways of generating revenue.
That is the essence of a bubble, being that it occurs at an accelerated rate with an increased production of companies that will fail. In other words, in a bubble many more companies based on unworkable, unsustainable or even crackpot ideas and plans will be generated and subsequently fail.
--- Void where prohibited. Your mileage may vary. ---
Yes, the "Web 2.0" bubble will pop, but nobody will notice.
I did Downside, and I have a good track record predicting Web 1.0 failures. Last time around, we had way too much capital going into bad ideas. "Web 2.0" companies aren't that capital intensive, and most of them aren't publicly held early stage companies. If that sector collapses, it will be a blip.
That said, we're seeing some high P/E ratios. Google's is 44, and Yahoo's is 45. Those are high but not insane. Reasonable values for a big, successful company are in the 10-20 range. (Microsoft is 21, IBM is 17, Boeing is 23, AT&T is 20, News Corp is 21.) It's not like last time, when we were seeing P/E ratios above 100. Some of that history is at Downside's Deathwatch. ("Chart is not available for this symbol" means the company is so dead their ticker symbol is ancient history.)
As an investor, I'm much more worried about housing and energy issues. Oil is at $77/bbl today. That has much more impact than anything in the web area. The US housing bubble is deflating, foreclosures are way up, too many adjustable-rate borrowers are being squeezed by rising interest rates, and it's not clear who holds all the paper collateralized by mortgages. Parts of the financial services sector will be squeezed hard by that. Those issues are 2-3 orders of magnitude bigger than "Web 2.0".
Mike Sheldrake's blog is like a play-by-play tracking the demise of the real estate industry. The action has been fast and furious of late: collapse of two (er, now three) Bear Stearns hedge funds which invested in subprime mortgage debt and the sudden collapse of a non-subprime mortgage lender, American Home Mortgage.
This is more than a 'web 2.0' bubble: this is the final stages of the America bubble. The bubble started with the establishment of the Federal Reserve Bank in 1913, grew through the first and second world wars, Korea, Vietnam, the Cold War, Gulf War I. Gulf War II and the "War of Terror" is the pin that popped the invincible American Military Machine - the military-industrial complex is trying to fight a 4th-generation war with 2nd-generation (superpower vs. superpower) tactics, according to one Iraq veteran.
I'm actually really optomistic about our future. The America Bubble has turned milions of Americans into miserable wage-slaves, or worse. There is an incredible amount of poverty here, in this land of plenty. The present economic restrutcturing is necessary, and so is the eventual politcal house cleaning. I look forward to the day that the Neo-Cons become Neo-Convicts. Hopefully GWB will get frog-hopped out of the whitehouse (that is, with feet and hands cuffed together)...
Learn the rules so you know how to break them properly.
www.teslabox.com
If you look at his list of potential failures, the only thing they really have in common is M$ interference. Dorvak pours scorn onto a bunch of network uses but misses the obvious failure. User generated content, mobile internet (iPhone a "bad sign"!), online advertising, video mania, and social networking are all laughed at, but are far more solid business ideas than an OS and file format monopoly. When M$ hits the skids, we will see fewer broken toolbars, better video on demand and more reliable online advertising.
There are plenty of "bubble" companies that would have survived if there were not the action of incumbent companies. Significant last mile problems created by telco and M$ doomed many good ideas that are now flourishing. Sure, using FedEx 40lbs of dog food may never be a good idea but we will eventually see next generation grocery stores that take much less effort and give much greater choice and information. The public execution of companies like mp3.com are blatant examples of anti-competitive behavior. I'd consider Dorvak a lot more cluefull if he were able to connect the dots of the last crash.
I'd rank him IQ 100 if he were able to see the disaster that's yawning before M$. M$ never fully recovered from the last bubble and their stock price reflects that. They made his list for a few quirky ideas but there were many more, like a "squirting" music player with it's own special digital restrictions. Every idea M$ has is designed to further entrench their OS monopoly and almost all of them outside OS and Office have lost money. Now even their core products are in trouble, and make no difference to their bottom line. M$'s monopoly position depends on public and vendor perception that's quickly changing. It won't be long until we look back and see M$ and Pet.com in the same incredulous light.
Friends don't help friends install M$ junk.
What a moron... "everyone agrees"... yeah, nice way to support your argument. What is this crap that Slashdot keeps posting?
It was Pets.com, and you are certified batshit insane if you can sit there and actually make that comparison with a straight face. After reading your long rant I must assume you are serious... and that you should seek professional help, or just find another hobby.
The timing of this is interesting: investors are all excited about the Vmware IPO on August 14th.
Which shows a simple thing: if a company has a solid product, chances are that it won't "bubble".
Anyone in IT has a pretty good understanding that Vmware for example is not some speculative hyped stuff, it's a valuable, leader on it's field product, which is unlikely to crash as an investment, since none of the competitors are even close.
Well, but it seems that those "real business plans" these days are basically just to get bought by one of the big players or to make money through advertising, or both; and the only thing that companies, that fund or buy startups, seem to care about is a huge userbase. The best example is perhaps Google, who bought Youtube besides already owing a video streaming site themselves.
Look, I don't hate Dvorak, he's sometimes (OK, very rarely) insightful and his rants are often entertaining, but why does Slashdot have to generate hits for him and act as his forum? Cringely has his own board now, let Dvorak make one for his readers.
What's more embarrassing than getting caught reading Slashdot at work? Getting caught reading a Slashdot discussion about one of Dvorak's columns.
Never let a lack of data get in the way of a good rant.
As someone who has done a lot of work for PHBs wanting everything "Web 2.0" I applaud the opportunity to retire the term. Every time I hear it, I want to punch something.
Web 2.0 my shiny metal ass, bastards.
My sig sucks.
We all know that a sequel is always worse than the first movie.
Anyway, we can expect that episode 3.0 will be almost as good as the original.
Every time I start to have faith in humanity, I ruin it by driving to work between 7 and 8 am.
"The next internet bubble is about to burst, but I can't explain why or how so you'll just have to believe me! Here is a list of unrelated shit with some words in boldface to get you even more scared."
What a waste of time. Has this guy contributed anything notable to society?
"Remember when the U.S. had a drug problem, and then we declared a War On Drugs, and now you can't buy drugs anymore?"
Internet stock trading was suddenly made a lot easier which flooded the (previously relatively stable) stock market with a bunch of very inexperienced and irrational traders. They drove volatility and demand. Suddenly a stay-at-home mom could generate thousands a day by logging in a few times a day.
The venture capitalists supply these markets too and recognised a feeding frenzy. Float anything and it would get snapped up. This caused a boom in small start-ups created with no business plans and often no skilled staff/management. It did not matter if these start-ups would make it or not, they were just bait. Many employees of "real" companies got side-tracked into these failed start-ups wich impacted the entire industry.
Of course any such activity is not sustainable and a crash was inevitable.
So what's happening now? Well there's definitely a resurgence, but at least it appears most based on sound businesses principles. This will boom, but should not boil over.
Engineering is the art of compromise.
Until we have a load of schlocky IPOs hit the market, then there'd be reason for concern. Since this isn't happening, you may now please fuck off with the slow-news ratings day bullshit.
What?
Would you rather he comes here and plugs his site?
It's like a weatherman predicting rain in Washington state... "it's going to rain sometime this month." By golly he was right it did rain this month! Predicting economic expansions and collapses in vague terms is about as useful. I will now make a set of predictions myself:
There will be a massive killer earthquake somewhere someday.
A volcano will erupt and cause massive damage somewhere in the Pacific rim... eventually.
A US president will get impeached eventually.
A supreme court justice will step down.
Slashdot will report sensational tech stories foreboding the collapse of the tech industry.
Gas prices will go up.
People will die.
Taxes will be paid.
[signature]
I would say that people here never experienced an economic bump, although with the dot bomb bust from 2000-? I guess people have experienced at least one. Before that was the early 1990s recession, the 1982 recession, downturns in the 1970s etc. All of which have really been minor recessions - the economy derailed in the 1930s, only brought back by a major war and the government taking a permanent central spending role in the economy. There have been depressions before that as well.
The economy has gone in the toilet every decade or so for the last few decades, so I don't see why this is "chicken little"-ish. I personally think the opposite, I think people haven't seen a big bust since the 1930s in the US, and probably in my lifetime they're going to be reintroduced to a full-out depression. The way things are headed, there is plenty of fuel for that fire - overproduction, widening gap between rich and poor, the annulment of the Glass Steagall act, a housing bubble, massive debt in every sphere (government, personal) etc. I don't think doom is around the corner (although it could be), but anyone who thinks the US can not enter another depression is a fool.
The bubble burst is happening now and no its not with web2.0 its with the mortgage/credit industry.
v =38
http://biz.yahoo.com/ap/070801/wall_street.html?.
Too many subprime loans giving out at ridiculous rates(including outrageous home prices) and now we are seeing the aftermath as a result of these actions. Just take a look at American Home Mortgage stock. Just a year ago there stock was close to 40 bucks now its worth 1.40. If there is any fallout it will be a result from the mortgage industry dragging everyone down
As for web2.0, just don't repeat the same mistakes on what caused the dot com bubble to burst. If that can be done(which I know is hard for some to learn from history) I don't see the bubble bursting anytime soon.
And I suppose we should ignore the fact that you've failed to provide any actual information to correct the points that you feel are wrong.
GreyPoopon
--
Why is it I can write insightful comments but can't come up with a clever signature?
The dotcom bubble burst hard and bad because VC invested en masse in a bevy of tech companies, and they all used each other as vendors/clients/customers. When the VC $ dried up, those without sufficient external revenue sources bombed. As far as I know, this is just not happening now. Additionally, commodities like bandwidth, colo space, etc, are now FAR, FAR more competitive than they ever were in the 1.0 days. (You can get ~tier one bandwidth at $1000 for 100/Mbps measured 90/10, wow). That and Google has made a lot more "ideas" feasible because they're a lot better at monetizing page views. Servers are far cheaper.
Web 2.0 is software as a service, done piece by piece. Software isn't going away. The Internet isn't going away. So the platform may change, but software as a service delivered over the net isn't going anywhere.
but this is John Dvorak we're talking about. He's hit or miss. I think he's miss on this one because sometimes when markets don't resonate it's due to the lack of application to innovation. Right now there is a lot of innovation but what do we do with it. I mean web 2.0 is fine and stuff but really what good is it if all we do is popularize sites by bookmarking them. While we have faith in the consumers opinion, there are bots and spiders that can be used in a persons place. Web 2.0 has been argued over frequently for being over hyped. Regardless, there is a ton of other innovations outside the market that will sustain our economy outside of web 2.0. Screw Web 2.0, it's a marketing innovation. On top of everything else, even if there was a bubble burst, it wouldn't be as bad as post 9/11. I think we learned from that experience so we know how to handle those types of situations with a little more perspective. In summary IMHO, if there was a burst, it would be a blimp on the radar. We would move on and hopefully we were smart enough from the first time to protect ourselves from the mistake a second time.
No, the real madness was M$ thinking they could really force the world to use and pay for something as easy to copy and replace as software. The amazing thing is how long they pulled it off, but it's over. Get used to it, companies and users are claiming their freedom.
Friends don't help friends install M$ junk.
(Disclaimer: my work on y2k issues was only incidental. It was not the primary part of our work.)
I think the y2k issue could be related to the dive, but it wasn't because it ended up being uneventful. It was because it ended. If we had done a lousy job preparing for it (but still hired all of the people to fix problems), it still would have mainly ended on January 1, 2000. For some people disaster might have prolonged their job situation, but I suspect that for most people it would have made things even worse. If your company didn't fix most of your code by 2000, it most likely wouldn't be around anymore to pay your salary to fix problems afterwards.
Ben Hocking
Need a professional organizer?
Did I miss something? Are IT and web development jobs suddenly a dime a dozen? Has investment in web "2.0" startups been going up? Are we back to hiring high school dropouts and paying them network admin salaries for looking up porn on the internet?
Last I checked, the economy was just barely rebounding from our last bubble-bursting. Hardly charging forward to our next one. If there IS going to be another bubble, its going to be around another new set of technologies that investors don't understand but think must be worth money (*cough*iPhone*cough*). The web won't be it.
If you can't find a real troll, just mod down whoever you don't agree with!
He actually gets paid for that tripe right? Crap I wish I had such an easy job.
"The economy fluctuates" give me a million dollars!
Seriously though, he doesn't mention one concrete thing that is "going" to spell disaster. Further, with the way web 2.0 companies have capitalized themselves, there really isn't much to "pop". Yeah some angel investors might be out their 50-100k, but its not going to be anything like webvan blowing 2 billion in 2 years.
Sure the job market might get tighter again if all these web 2.0 companies go belly up, again though, most of these companies have 10-20 employees, they aren't big huge concerns, its not like the companies in 98-00 that were raising hundreds of millions, hiring thousands, and then going bankrupt 2 weeks later.
Sure, we'll have a downturn in tech spending, in development, in advertising on the internet, that's going to happen, "predicting" that we'll have another downturn in technology "sometime" is like "predicting" that the sun will rise sometime in the future. The economy has fluctuated in a cycle for ever, and it always will.
How does Dvorak stay employed. He's the Chicken Little of the really really REALLY peripheral tech-rag industry. Worse is the fact that he's even mentioned on /.
Cause I remember the feel of the late 90s and it was night and day to what it's like now. Companies are so tight with their budget now that we're actually using equipment that would have been considered old during the last bubble. In fact, we lose and turn down customers because our equipment can't keep up or fails. That's insane (you don't turn down ten dollars to save a buck), but emblematic of the shell-shock that executives are still feeling from those times. Despite some big profits, I haven't seen spending returning to reasonable levels, much less the excess of the 90s. We've turned out the lights in the vending machines, no longer water plants and don't maintain the landscape anymore despite the fact that I work for a major, very profitable company.
The dollar bubble is a much more serious concern. That's the bubble of all bubbles and it's popped. No one wants anything to do with it anymore given how recklessly the US congress has been spending our money (for things most people are very much against). No one wants our bonds and oil producers have started selling in Euros instead. The fed's answer: print more money. All "bubbles" spawn from this one and the eco-pundits treat it as a good thing cause it'll encourage exports, as if we still exported anything other than weapons. As a web application developer, I'd much rather the discussion be focused on the big picture rather than any one portion of our economy that is merely perceived to be inflated. The rest would work itself out on its own if we'd stop pumping worthless paper into the economy.
FTA:
"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."
Every single person, really.. every single one.. you talked to them all? That's quite an impressive feat and makes the rest of your article that much more believable.
Did I really read that? The mans an idiot!
no digg :p
It's strange. Once upon a time I had great respect for this journalist. That's back around the mid- to late-80's when PC's had new things going on with them, and when his books on low-level programming (DOS interrupts, etc.) were rarely informative and succinct that he'd earned some actual respect in my world.
m y-own-web-usage-ways) but he doesn't seem to have any connection to that.
Now days this guy seems to f---ing out of it; he's a pundit in the lowest sense of the term. Come on: what does "Web 2.0" mean these days? I'm actually using, on a daily basis, a number of web sites and technologies that are based on these new-and-coming technologies like social programming and AJAX and whatnot, and the sites that succeed are actually ground-breaking (not in the hyperbolic sense, but in the I'm-finding-myself-using-them-daily-and-changing-
Dvorak has become a pundit in the most derogatory sense of the word. It almost makes me embarrassed to have bought (and coveted) whichever book I'd made dog-eared back around 1986. How far the mighty have fallen!
Murray Todd Williams
Regardless of whether the next bust will affect Web 2.0 (I agree with the above analysis that this will be a blip), there WILL be an economy-wide bust. We are poised for it, just as we were around 1997, and for the exact same reason: the Fed pumping the money supply like there's no fucking tomorrow.
.com boom (and hence the bust) in the first place. P/E ratios of 50 are supposed to be a _good_ sign? As if the fact that they are not >100 _yet_ implies that we are magically in a post-business-cycle world?
I can't believe there are two hundred off comments and not a single one (that I saw), on the actual reason for the
The signs are all around you. Weak dollar internationally, impossibly low unemployment, government spending through the roof, rock bottom interest rates year after year while the Fed stops publishing M3, starts emphasizing "core inflation" (i.e. inflation without food and energy), starts changing the goods in the CPI commodity basket (i.e. removing the ones that are rising the fastest because they are "too volatile").
The economy is being rotted from the core by malinvestment, in every sector, caused by years of artificially loose credit. It's completely unsustainable. Clinton's Fed inflated at top rates of 15% per year. Bush's has pushed 20%, and all of the dancing with the numbers is not going to magically make all those malivestments profitable when the shit hits the fan.
Insert humorous sig here.
I sure I'm not telling anybody anything new but I was a player in the dot com bubble and I got burned by it. I think there are a lot of people with burned fingers out there who are very reluctant to get caught again. Personally, I don't think we are any where near a second coming of the dot com bubble; indeed it may be that everything is just peachy right now.
Today is an ephemeron, doomed to the crypt of yesterday.
I've already been hearing about the "greentech" bubble.
VCs for various reasons (mainly, the upward transfer of wealth in the Bush-era economy) have record amounts of cash to spend and they're no more clued than they were when they funded pets.com and boo.com . The usual result is a bunch of overvalued tech startups which will collapse shortly after discovering that there is either no realistic business model or that the dozen startups that got funded before any given VC invests in a new tech area already ate that company's lunch for it.
Tech Public Policy stuff
Aside from the giant advertising revenue dependent portals (Google, Yahoo) and social networking sites (My Space, Facebook), there are companies with real business plans that are actually making real money this time around. Spending is relatively in check without the largess the first .dot bomb era (ummmm....if there is a company with hired sushi chefs for lunch and masseuses....please contact me for a resume). This time around it seems like there is less cash, more business sensibility, and the base of the web economy seems so much more stable (ie the small businesses). I believe that the biggest downfall of the first .dot bomb era was VC and investment banks pushing shaky companies with poor business models to go IPO. We don't have that here. The big crash is going to happen when media people decide that pay-for search ads and internet advertising is not worth the cost (mostly because the conversion rates aren't there and the general disdain for advertising on the internet as a whole). Hey Dvorak is entitled to an opinion....and as its been said: like a$$holes, everyone has one!
Badges!?! We don't need no stinking badges!
Most financial bubbles are pretty easy to spot: An asset class climbs way beyond what old-fashioned valuation measures used to define as reasonable, market participants start acting like idiots, and pundits rationalize the madness with learned "new era" theories. Think late-90s tech stocks or California houses in 2005 or today's Shanghai stock market. This kind of bubble announces itself loudly, making it easy to ridicule and/or bet against.
But today's U.S. stock market is a different, trickier, far more dangerous kind of bubble, because the stocks that are wildly overvalued actually look pretty cheap by traditional measures: Banks and brokerage houses at 12 times earnings, homebuilders at 1.5 times book, retailers at 1 times sales. In terms of historical trading ranges, there seems to be nothing here to get excited about.
But look a little closer and you see that these are classic "value traps," stocks that seem cheap but are actually wildly overvalued because their underlying earnings, book value, dividend yield or whatever are artificially inflated. Value traps are common at the end of long expansions, when corporate earnings have spiked because of supply constraints, but stocks haven't, as investors begin to suspect--rightly--that demand is about to slow, thus compressing profit margins and sending earnings off a cliff. Hence the juicy-looking valuations.
It's a series of Tubes.
Sorry about the writing. Robot fingers, you know? Cliff Steele in DOOM PATROL #23
...It's déjà vu all over again...
A supposedly professional writer using a redundant phrase like this? The moron's a moronic moron more moronic than the winner of the 2007 world moron contest.
The first think I thought when reading this article is that the author is just trying to drum up fear. What kind of person would create propaganda like this, knowing that many people will read it, and that many of those people might take it seriously?
There is absolutely not factual basis for the authors believe and I am surprised this garbage even got through moderators and made its way to the front page.
-- Betting on the survival of the media industry is a serious risk. I advise investing elsewhere.
Sounds like a whiny teenager / abusive spouse:
I SWEAR its gonna be different this time! I PROMISE! Come ON, PLEASE!
Just give me some money! I'm not gonna make the same mistake I made last time.
Good security is based upon reality and common sense. Common sense is a function of having common knowledge.
Before a bubble can burst it has to be defined. Since nobody actually knows what the nebulous term "Web 2.0" actually means then it's chances of bursting are akin to that of a black hole getting laid.
Well, if we expect this burst/bubble/burst cycle all over again, ad infinitum, I move to begin the dismantlement process now. We should be able to return to Dark Age mentality in no time, with so few people performing skilled or artisanal labor any more.
/now is the time/.
Yes sir, if you've ever looked for an excuse to prop a fresh 5-Gallon jug of Ozarka in the top-most exhaust port of an enclosed rack, then pop the cap for a magnificent cascade of sparking, sizzling ruckus -
Unlearn the "double-click", forget about "http://", and go out and buy this week's volume of the Encyclopaedia Britannica. It's going to be a long, arduous decent into manual processes, pens, pencils, and paper forms.
They need to start releasing some point releases to these things.. Let's see Web 2.1. Maybe it will be better!
The first bust was purely financial - investing in businesses that had no business plan - ie no way to make money. The enabling technology had nothing to do with it. Arguably the technology and attitude has changed this time (Arguably because I'd argue against it - it just Gen X + 1 trying the smae thing as Gen X) but the same result will occur - buliding businesses with no business model = going bust.
Myspace is popular, but is just the flavor of the day. Facebook is just another flavour, youtube is just another trend of the moment, ditto Joost etc etc etc. Why these businesses have been purchased/valued at huge $$ is beyond me. Why make the same mistakes over and over?
Anyone claiming Web 2.0 could be the "worst bust yet" should look in their history textbook under "October, 1929" for starters.
Cattle driving... mining... farming... random websites with no feasible business plan... The West is a boom and bust place. If you're not ready to play with bubbles, head eastward.
Ceci n'est pas une signature.
On that note, the excellent card game of the same name is FINALLY back in print:
http://www.burnrategame.com/
"Here's your chance to go back to 1999 and do it wrong, all over again. With a fun new card game called Burn Rate, you and your friends will become dot-com CEOs with great funding and terrible business sense. The object: be the last one to lose all your money."
The last time I played, I ended up losing horribly after being forced to execute a business plan that included free internet access.. with free computers... delivered by bike messenger... and I think there was a "butler-themed search engine" in there somewhere too...
His predictions may be wrong (Dvorak)
But the wilder they are, the higher is page hits are. Which means he's raking in $$$.
Sounds like genious to me
FRONT TOWARD ENEMY
Classic. As our company commander in Afghanistan liked to say "the only rule you need to know about being an effective infantryman is printed on the front of the Claymore".
If a job's not worth doing, it's not worth doing right.
1. Say obviously wrong and contentious stuff.
2. Generate hits from people who have an urge to correct but do not realize they are being duped.
3. Collect Ad revenue.
No ??? anywhere in sight.
If I have seen further it is by stealing the Intellectual Property of giants.
Everytime I come across a "2.0" website, its filled with tons of javascript crap and ccs, takes forever to load and compile and execute the javascript (or what ever the browser does it) - Go back to the days of content over style.
If Google really cared they would fix Android Chrome to reflow text, instead of discriminating
Is there any method to filter out all stories posted by a particular editor?
Zonk posts the vast majority of all trolls, flamebait and innaccurate stories. I'd hope that he might be somehow disciplined or even fired but I think that is too much to hope for.
FWIW I've been thinking of subscribing however the quality of Zonk's work makes that unlikely.
meh
Apple and Google are the two hottest tech companies today and they are both direct to consumer, used by regular people, not procured by I-T from an approved list from head office. People from all walks of life choose and buy and use Apple products, and people from all walks of life use Google Search and read Google Ads and even think "Google" means "Internet". That is real meat in the seats. You can rely on those people to come back again and again. They're proof that Apple and Google can sell to any arbitrary person, they have 100% potential user base, not just the 10% who are computer nerds.
You can't scale up with the expansion of the Web if you're only selling to nerds, the nerds get here first, the later people are way less nerdy than you would think. For example, PC Magazine may have had 50% of the Web as their readership in 1995, but that didn't scale. The white box PC didn't scale, it's been replaced by phones which is only just becoming obvious as the phones get real Web browsers. MS Windows didn't scale, with 60,000 coders they took 12 years to get from 4.0 to 6.0 and the only innovation was the botnet.
During .com anyone who could get Word to spit out HTML or fire up dreamweaver was capable of getting a fairly high paying job and "becoming a web developer." Not surprisingly, simply building web sites isn't such a great business. VCs and investors ate it up though for a while.
This time around there are 2 differences, more places are trying to get foreign tech laborers to do the actual "real work" and they build a web site here and the websites are fancier. There are some businesses that I just don't see lasting, I don't see how building an AJAX website is really that different than building just a website, still at the end of the day you need to make money and do something.
Maybe I'm getting old school here, but when I look at digg, and I see the top rated "news" stories of sorts, it really makes me think that the masses are really stupid. It's all very formulaic. New Harry Potter book on Piratebay before it comes out just isn't "technical" news to me, it's not really even news to me. Maybe I just don't get it, there is pirated shit on piratebay and that's somehow now news? Or someone figured out how to photograph or photocopy a book and pirate it that way, that's the news? (I mean, people did that in the 1980's, they just photocopy books..) Or maybe it's just "oh snap! MPAA/RIAA/whoever does books-AA you got served!" and while it's not news, someone wanted to say that and the masses "dugg" it. If someone somehow managed to sort of do the whole social networking thing and link up like minded folks (maybe some sort of passive IQ test) then maybe it'd all be more interesting. Personally, I can only take so many Lohan and Hilton stories before I just look elsewhere for "news."
Now I don't know if there is a bubble that is bursting exactly, seems like the money involved is a tiny fraction of what it used to be but if you think this kind of shit is the way forward, I certainly hope that it's not. We can do so much better.
Why are you trying to turn this discussion into another Microsoft hate party? Why do you feel the need to come in here and post some stupid FSF-sponsored blabber about "M$ Windoze" when the whole thing is about Web 2.0 companies? WHY? Save it for the Microsoft articles, OK?
What the fuck is web 2.0 anyway? Everyone seems to have their own definition. There are eerie similarities between this web 2.0 nonsense and the Liftport space elevator vaporware : http://www.liftport.com/
I think it is a total crap. Like somebody saying end of the world.. http://rafiq.us/
Sheeleytech talks about this exact idea of "web 2.0 and mortar" http://www.sheeleytech.com/2007/07/web20andmortar. html
From the post
Great post! http://www.sheeleytech.com/2007/07/web20andmortar. html
...
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.
The causes of the business cycle have been known for quite a while. It's just that we keep deluding ourselves that the next bust won't happen. Inflating the monetary supply encourages investment in productivity, but hurts consumption. Eventually the two get too far out of whack and we get a correction. http://www.mises.org/story/606
Getting out of this cycle means taking your hands of controls of the monetary supply. Milton Friedman suggested indexing the rate of monetary growth. More radical economists suggest getting rid of the Federal Reserve entirely and going to a hard commodity or other value system. The latter has some merit, but is politically unrealistic.
Don't blame me, I didn't vote for either of them!
... but not as stupid as Michael Liberal Geist.
"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. ..."
;-)
Comparing the "dot-com bubble" to some purported "Web 2.0 bubble" is quite bogus, for a simple reason. The concept of "dot-com" was well defined. Basically, you could look on the end of a web site's name, and if it ended with the four characters ".com", it was a "dot-com". There was a bit of bogosity present, in that some ".com" sites weren't in fact commercial, while some sites ending with a different top-level domain were commercial. But the fundamental idea was fairly clear, and it was easy to determine whether a site was or wasn't a commercial site.
With "Web 2.0", however, this isn't true. If you go looking for definitions, you'll find thousands, and you'll have problems finding any two that are the same. Thus, many definitions include the idea that the downloaded pages contain client-side code (aka "scripts"), but this isn't always true. Some people call anything with non-HTML inside HTML "Web 2.0". I've seen sites claim to be "Web 2.0" because they contain CSS. Really.
Fact is, "Web 2.0" is nothing more than a vague, fuzzy marketing buzz-phrase that means whatever the writer wanted it to mean. It tells you little or nothing about the actual content of any site.
So there isn't a "Web 2.0 bubble". Rather, there's a lot of hype around that uses the phrase "Web 2.0" to mean "Our site is cooler than those others." And there are other sites using very similar techniques that don't hype themselves as "Web 2.0". Often this is because they don't need to hype themselves. See maps.google.com for a good example, and try finding "Web 2.0" anywhere at that site. (Actually, I suppose it is there somewhere; can anyone find it?
Rather than a "Web 2.0 bubble", what we've got is zillions of little, each bursting individually and splattering their neighbors. So what'll happen is that the marketers will slowly, one by one, realize that this buzz phrase has outlived its usefulness, and they'll move on to other words to hype their stuff.
And that's something that's gonna be with us for the long run. Once commerce successfully took the first successful steps onto the Internet, it was inevitable that marketing in all its glory and sleaze would move there, too. Dvorak is merely propagating the typical marketing process. Part of that is that old words become, well, old, and need to be replaced. But that doesn't mean that any bubble has burst. It's just the ongoing process of finding new ways of shouting "New! Improved!" at the marks. That's been going on for centuries, and isn't going to stop in our lifetimes.
Those who do study history are doomed to stand helplessly by while everyone else repeats it.
Why are you trying to turn this discussion into another Microsoft hate party?
Statements of fact are only a "hate party" when you hate reality.
Why do you feel the need to come in here and post some stupid FSF-sponsored blabber about "M$ Windoze" when the whole thing is about Web 2.0 companies?
I'm not FSF sponsored or stupid, thank you, but I am sick of hearing propaganda about the "bubble" of the late 90's. Many if not most of those companies were crushed by the incumbent powers of the time, which include M$. Blather about the "bubble" blames the victims and masks wrongdoing.
Friends don't help friends install M$ junk.
The current P/E of NASDAQ is 24. That's a tad high; with bond yields around 5%, a P/E more than 20 must be based on growth speculation. I could reasonably see the NASDAQ losing 20% of its value in one shot. However, during the bubble, the P/E of the NASDAQ was over 100.
It's hard to overemphasize the difference between these two numbers. Look at the ratios between the NASDAQ P/E numbers and bond yields. Our current ratio is 1.2, which is 20% "too high". The bubble ratio was over 5.8, which 480% too high. The two situations are not even comparable.
If the NASDAQ actually lost over 75% of its value, like it did when the dot-com bubble burst, I'd be buying as much of QQQQ as I could get my hands on.
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
I still haven't been able to nail down his most infamous predictions .... anyone got anything good to offer up? I know that when he comes up it's time for commenters to bash him for his predictions, but can I have the supporting evidence/origination of the meme for $500 Alex?
...unfortunately no one can be told what The Mat^H^H^HGoatse is...they must experience it for themselves...
Look at the size of tech magazines. The number of ads they sell is directly related to the current boom. During the '99-2000 bubble tech magazines were huge! Look at an old issue of Wired from 1999. After the bust they shrank to a quarter or maybe a third of the size they had been (if they didn't go out of business themselves). They've been slowly growing since, but they haven't nearly reached where they were during the first bubble.
albeit a small one. It is clear that VCs are funding a lot of copycat companies that probably will never be really successful. That being said, the notion that this will be anything like to dot.com bubble is nonsense. Then there was a lot of money chasing companies that had no revenue and no sustainable business model. Internet advertising was a novelty and the watchword was eyeballs regardless of revenue. Now people care about eyeballs only insomuch as they generate actual revenue through a solid advertising based business model (thanks to Google). Therefore, the ad dollars will not dry up, and most of the companies started will survive. Also, the valuations, while too high, are not insane like before. MySpace, for example, is worth far more now than at purchase; Google's IPO price was one of the bargains of the century, etc., which is unlike the crash and burn experienced shortly after most IPOs in the last cycle. But certainly there will be a winnowing out, as there should be.
Looks like you're trying to bash Microsoft!
Would you like me to:
o Show you how to use dolar signs to be cool
o Help you come up with a dumb conspiracy
theory that involves Steve Ballmer and
farm animals
o Play "Give Us the Source" by RMS while
you crapflood Slashdot or Digg
o Recompile the kernel again
_____
/ \
|- -|
0 0
| | |
| | |
| \___/
\______/
"Laugh while you can a-monkey boy!" - Dr Emilio Lizardo
The AOL floppy disks were actually useful. I've made many backups on them. In contrast the AOL CDs were not even good as coasters, since they had holes in the middle...
Excuse me, but please get off my Pennisetum Clandestinum, eh!
Ali-Baba, how do I work the monitor??
During the dot-com era, you couldn't raise a dime for anything not web based. Trying to fund a more traditional IT business (was shopping a Linux based office business plan, that a few years later would have been hot) was impossible. Even friends and family money was impossible, because with the bubble in the market, people were getting 30%+/year in returns in the market, why risk anything on a real company.
Also, remember tech salaries. The dot-com's were flush with cash and raided everyone else. Salaries either had to explode in tech, or companies were robbed of their talent. That made IT much more expensive to maintain.
The artificial bubble had HUGE ripple effects, because the artificial influx of cash was warping all sorts of other markets.
Market capitalization is "trading price" * shares outstanding. However, only a small percentage of shares might be traded.
Hypothetical company Acme Web company. It has 10m shares outstanding, 7m of which are held by insiders, etc. If the shares are trading at $20, the company is worth $200m. Shareholders have "$200m" in wealth on paper. If the 30k shares that are trading each day get hot, maybe the price goes to $25... making the company worth $250m... but only 1000 shares traded hands at $25... it's all theoretical.
If the company tanks, and sells in liquidation for $1/share, the company is worth $10m. In that case, $240m in "value" was lost. But wasn't it sold on the way down? Probably not, 7m of the shares are still held by insiders, and most of the other 3m didn't sell as well. Only a small percentage of shares are bought and sold.
The reality is, if the shares were all being sold rapidly to "get that value" then the price would crater. The stock price is ONLY maintainable at current levels if the shares floating in the market is relatively stable.
It isn't like all the shares are changing hands... When GM's stock is quoted, it's often for a trade of 100 or 500 shares... valuing all of GM based on that small trade. GM has 586m shares outstanding, 22m of which are trading at any given day. The other 564m shares are based upon the trades of those 22m shares... if those 564m shares came on the market tomorrow looking to sell, they couldn't collect $32.73/share.
Normally I avoid outright insulting you but GP was right, you are stupid.
"It does not do to leave a live dragon out of your calculations, if you live near him." - Tolkien
I don't see the inflated values and expectations (except maybe Google, but if they deliver...) present in the first internet bubble.
OTOH, _eventually_ rising energy prices will put a damper on the economy -- possibly "permanently". Unless we find, virtually, complete replacements for non-renewable energy sources, things will *stop* when the energy runs out (global warming or not).
As energy prices rise, the cost of virtually everything will rise -- this will drive prices up, but salaries & compensation won't be able to match, since without energy, productivity will first slow and then grind to a halt. That would be a pretty nasty form of "run-away-inflation". Of course those nearest the economic bottom will be hurt the most -- assuming they have enough food/resources to survive.
{{fact}}
He is just a troll. Back in the 1.0 bubble there were many start-ups selling useless web apps.
Today, we have really useful 2.0 apps like twitter, WatZatSong, Story of my Life, ConstantComedy, myspace, RubyChip, loose stitch, rize-it, etc..
It's a whole lot different now, it's a whole lot better.
I don't see anything inflated here. Yes, there are quite a few Web 2.0 shops doing lots of Web 2.0 stuff (whatever that exactly may be), but compared to 2000 their price performance ratio is by orders of magnitude better. If I choose to build a Web 2.0 app (I'm actually considering that) it will cost me 200 hrs of my own time and a few thousand euros at most. Back then web companies where burning millions just to get the bandwidth and a halfway decent RDBMS up and running. Armies of keypunchers where building static webdocs and a CMS the likes of Typo3 or Joomla would've costed upwards of 500000$ and require a few million dollars worth of hardware. Today it takes a single 16 year old teenie 2 weeks of his autum vacation and a 30$ webhosting slot to build a viable flickr competitor.
... Dvorak is a blockhead. My essays & predictions on webstuff would be thrice the worth and value.
Bottom line:
There is no bubble the size and hype of 2000. There may be an inflated market of rich web shops and project, but not even a fraction of the burn rate or bound capital of back then. Nothing to see here, move along.
We suffer more in our imagination than in reality. - Seneca
..when compared with the imminent real estate-sub prime lending-lending-bond market-stock market chain collapse that is happening right now.
We are going somewhere in between sub prime lending-lending and bond market. Bond market is starting to feel the first effects while sub prime lending is collapsing under the banks' feet.
The only reason US has a good credit rating is that everyone is afraid of the collapse it will cause. Hence artificially prolonging the inevitable and in doing so making the eventual collapse even worse.
All in all this will be a good thing.
In the short term people will lose jobs and there will be misery all around but the end result will be a healthier economy and hopefully healthier world.
Irrational Exuberance has some good analyses as well.
Everything I needed to know about life, I learnt from Blake's Seven
Maybe he is not a clueless idiot. There are a hundred thousand clueless idiots who keep trolling. How come there is no discussion about their views. If he truly was a clueless idiot, the world would not be discussing him. Does it occur to you, we might be the clueless idiots who keep arguing about his intelligence while he laughs all the way to the bank. If all it took to be talked about was being clueless, I will start writing a blog:-)
O this learning! What a thing it is - William Shakespeare
I say we skip the burst and go straight to 3.0. Then everybody's happy since there's no bursting, and we can stop talking about 2.0 finally.
sometimes the outrageous things he predicts don't occur because he predicted them.
Last time, anyone who called for examples would get literally hundreds of them. This time, it's hard to come up with half a dozen. It's not that big a deal to invest $50k in a weird little idea. The problem happened because people were throwing multiple millions at stuff that didn't even really make sense. If you had a frisbee that checked email, you would have walked away with a twelve million dollar starter. Match that with a culture that demanded $100k introduction parties and that was buying posh cars by the transport truck, and you're looking at a disaster just waiting to happen.
This "bust" is things returning to normal - small-ish investments in tech companies that are expected, on the whole as a group, to fail. People like Dvorak, whose entire exposure to business is through tech sites, see normal investment and fear that it'll all collapse. What people like Dvorak don't understand is that failure in invested companies is normal. Before the Dot Com bust, failure in invested tech companies was way over ninety percent. What Dvorak doesn't understand - what none of these tech writers seem to understand - is that from their vantage, they cannot tell the difference between a bubble and normal investment .
The characteristic difference that converts normal investment into a bubble has to do with how much money is going into these firms, and what rate of failure the investors are aiming at. Aim too low, and you don't grow fast enough to keep up. Aim too high, and you bust.
Aim too high as a group, and you get a bubble. That's what the 1980s S&L scandal was - banks taking risks they shouldn't, in order to get business. "Well, we shouldn't loan to this guy, but if we don't, Second National will." That's the mindset that creates a bubble, and that isn't happening today. You take an investor aside, you ask them how much they can afford to lose, and you ask them how much they have invested. If you can get those two questions answered by several hundred well-distributed investors, then you can get a small cross section of the people who're actually involved in this.
But, given that this is the same press who crowed a brave new world at the peak of last bubble, I don't really care if they think we're in a bubble now; it's clear they have approximately fuck all clue what they're talking about, not that this should be surprising, considering it's Dvorak, The Man Who Admitted He Trolls Professionally.
Call me when the people preaching gloom and doom are the ones without a track record of miserable, total market grokkage failure.
StoneCypher is Full of BS
Look at the housing market, particularly California.
Of course, since we're talking about actual property that doesn't go away unless there's an earthquake, fire, or act of god (or jihad), the rate at which the collapse occurs (and the corresponding news coverage) is a good deal slower. Also, you didn't see as much VC in home building, so the collapse won't be as violent (except if it gets *really* bad (much, much worse than I currently forsee, in which case major banks will start to go under, and we'll be back in the 1920s).
By and large, modern Web 2.0 tech companies have some sort of plan. Some of them will go out of business, and the majority of those will be purchased by bigger companies who are profitable. We're going to see a lot of M&A in Tech (that's what happens in markets with too many start-up players), but I don't think we're going to see capital flight, mass layoffs, and a stock market crash.
WhiteWolf666 an exBush supporter. All you new-school,compassionate,save the children Republicans can rot in hell
Where does he get this duff? The .com bubble of yore was seriously funded by badly invested venture capital. This isn't happening this time, the bulk of any measurable growth in web ventures is internally funded with little start ups or venture capital involved. What a load of horse crap.
They both take something small and turn it big :-P
http://slashdot.org/tags/dvorak
/. link...
Check the third-to-last article listed under the tag "Dvorak". It's not a
How'd that get in there?
"In a 32-bit world, you're a 2-bit user. You've got your own newsgroup, alt.total.loser." -Weird Al
What I imagine Dvorak does is think up some decent predictions, then claim the opposite.
Please, for the good of Humanity, vote Obama.
Anybody else notice the timing correlation with the day Gore said something along the lines of "Duh, yeah, I wanna tax cut too, just like George". Eh, probably just coincidence.
There is absolutely no tech bubble, anywhere near the millennium bubble. This correction that we're going through has more to do with monetary policy, and the bloody Bush administrations devaluation of the American currency. One trillion dollars on a failed war, and they didn't even secure the oil. What a bunch of idiots.
Salut,
Jacques
You are actually blaming Microsoft for the dotcom burst? Seriously, no shit?
BWAHAHAHAHAHAHAHAHAHAH!!!!
Oh my god. Hey, I know - why don't you go through this list and tell us which of those sophomoric money pits were "crushed" by "M$". That should be really entertaining. Or better yet, why don't you write another little journal entry with lots of dollar signs and lies that explains how these "companies" and their excellent "business plans" were victimized by Microsoft! I know I for one would be really entertained by that.
Web2.0: I love when people Flickr my cuil and digg my boingboing until my google is reddit and I start to yahoo
Oh my god. Hey, I know - why don't you go through this list [wikipedia.org] and tell us which of those sophomoric money pits were "crushed" by "M$". That should be really entertaining.
Remember Netscape, the anti-trust trial and all that? Part of the reason there was a melt down in the late 90's was because people realized they were not going to make any money in personal computing as long as M$ was allowed to operate the way they do. The other parts of the meltdown were caused by telco and publishers systematically destroying their competition. Surely you remember having a choice of DSL companies and online music vendors like mp3.com? The "money pits" are easy to point at, but the meltdown was more about legitimate business than it was about bad ideas.
If Vista takes off, we will have another 10 years of computer stagnation, so it's a good thing that's not happening.
Friends don't help friends install M$ junk.
Try again, idiot.
Bwahahahahahahah!!!
Oh my god, I think it's been a while since I laughed so hard at something you wrote.
So if we consider for a second that "M$" did indeed kill Netscape (as opposed to Netscape killing themselves), that Netscape deservedly died long before the actual boom happened, and that the vast majority of dotcom flops where things like Pets.com and Kibu.com and Kozmo.com and WebVan and so on and so forth which had nothing whatsoever to do with software or hardware or IT in any way shape or form, what you're suggesting is that the hoodwinked investors for all these companies suddenly realized that "M$" was going to get to them, so they started buying Herman Miller Aero chairs and foosball tables en masse to burn through all of those VC billions?
Or is it that those companies got their VC funding because someone was afraid of "M$"? Or that the VCs stopped giving money to them because of something "M$" did or didn't do?
Hell, in fact I'd be happy if you just pointed me to a major dotcom bust that had based their "business model" on software that somehow competed with Microsoft in one way or another. I'm sure that you can apply the same zeal to that as you seem to put into collecting your "Vista suxxorz" FUD?
I gotta tell you, I'm not sure if I'm interpreting this effluvia of yours correctly, but maybe my contempt for your puerile theories is definitely getting the best of me. What exactly do you smoke, snort or shoot that makes you come up with these priceless little jewels?
Web2.0: I love when people Flickr my cuil and digg my boingboing until my google is reddit and I start to yahoo
Cash is not the same as wealth. Wealth can disappear even if cash doesn't. Wealth is not created when someone acquires money; it's created by the activity the person did to earn that money.
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
What's even funnier is that Netscape didn't go bust. Ever.
When Netscape 5 didn't get any marketshare, they funded the Mozilla Organisation to help them code 6. That's when they were bought by AOL. Even if the Netscape 4 issue was at the same time as the dot-com crash, Netscape would never have been a part of the crash anyway!
"It does not do to leave a live dragon out of your calculations, if you live near him." - Tolkien
This is not insightful. It's the Broken Window Fallacy.
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....