The WSJ today had an article questioning whether there is a new Internet bubble. It cites lots of goofy named companies, company perks like free lunches, and even one company with a 5-year old founder. Several months ago I wrote an article analyzing whether there was a bubble. I felt then and still do that any comparison to 1999 and 2000 is misleading. But the reality is there is no bubble. There are simply a lot of companies scrapping it out to get ahead.
Here's one thing about a bubble. If it bursts, a lot of people have to get hurt. If 90% of these Internet companies who would get hurt today. A few venture capital firms, a few institutional investors, but that's about it. There have been almost no IPOs of Internet companies so the general public has little if any exposure.
Google, one of the Internet bellweathers has a relatively sane PE and enormous earnings to support it. The days when a company with almost no revenue and deep losses could IPO with a billion dollar valuation are history and remain history.
If anything, I think more people in high tech wish there'd be a bit more attention to some of the exciting things that are going on.
Comments
ziggiZ
October 10, 2007
Google's valuation may be supportable if and only if online advertising stays strong. Some of the valuations that we are seeing in the online sales models - from Amazon to BlueNile - are starting to look like NetGrocer from 1999 again.
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