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Facebook, Instagram, Ben Bernanke: Thank You For the New Tech Bubble

Posted by Soulskill on from the grab-some-popcorn dept.

pigrabbitbear writes "Those who continue to inflate the tech bubble will be quick to remind us all of how they've learned from the past. That this time, it's simply different. They do have a point. Silicon Valley (and Alley) have matured. Startups these days are focused, driven, and efficient, creating products that people actually use. In a period of less than a year after its launch, Instagram was used by 5 million users, who by August of 2011 had uploaded 150 million photos. But even with these impressive results, it's impossible to ignore the fact that many of the fundamental economic factors that led the first bubble remain." A couple other readers contributed similar articles — Instagram's sale seems to have solidified the idea for many that we're in the midst of another tech bubble, though some are more certain about it than others.

4 of 124 comments (clear)

  1. Revenues? by khasim · · Score: 5, Insightful

    So it sold for a billion dollars.
    It must have had some serious revenue to make it worth that much.

    It didn't?
    Then we've learned nothing from the last bubble.

  2. Easier and cheaper ways to do that. by khasim · · Score: 5, Insightful

    Perhaps Facebook was afraid that Instagram was quickly becoming the go-to social network for sharing photos. Taking them out of the equation would have been worth it.

    Or you dump 1/10th of that money ($100 million) into creating your own app that does the exact same thing and is tied to Facebook.

    And you've saved $900 million. Which can be used for other projects or acquisitions.

    Of course since we're asking these questions about valuation, I have reason to believe we at least learned SOMETHING from the last tech bubble.

    If we have, I don't see it.

    The dotcom bubble was all about the IPO or selling to someone bigger and becoming an instant multi-millionaire.

    We have the huge IPO's again and now we're seeing the massive purchase prices of systems without viable revenue streams.

  3. Simple Explanation for Instagram by FsG · · Score: 5, Interesting

    For anyone who's still scratching their head about the instagram purchase, here's something to think about.

    At least one of Instagram's employees, Philip McAllister, was at Gowalla when it was picked up by Facebook less than 6 months ago.

    That guy might be the luckiest bastard in the world, having worked for 2 tiny companies whose only significant accomplishment was getting acquired by Facebook. On the other hand, Zuckerberg could just be funneling company money to friends?

    --
    I made a PHP/MySQL library that prevents SQL injection & makes coding easier!
  4. How many of the 5 million users are spambots? by tokengeekgrrl · · Score: 5, Interesting

    I'm always perplexed why the quality of the number of users is never challenged.

    How do you know a ton weren't generated as apart of some marketing strategy?

    Or rather, how can you NOT suspect that a significant portion of them aren't fake?

    Has the issue of verifying online registration as belonging to an actual, unique person been solved with absolute certainty while I wasn't paying attention?

    - tgg