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Dot-Com Bubble v2.0? 200

Posted by Cliff
from the oh-no-not-again dept.
eldavojohn wonders: "With the recent acquisition of YouTube by Google, there has been a lot of speculation (on both Slashdot & The Toronto Star) that we are nearing the second economic bubble created largely in part by growth in the digital sector. While one may be able to debate that the revenue from advertising and sales can indeed back this growth, are we headed towards the second bubble and, if so, how hard is it going to pop? Keep in mind that popular voodoo economic theory has attributed the first bubble phenomenon to 'a combination of rapidly increasing stock prices, individual speculation in stocks, and widely available venture capital.' I think we're experiencing all those, although it is not as flagrant as it was during the first bubble. What do you think?"
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Dot-Com Bubble v2.0?

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  • by Jazz-Masta (240659) on Wednesday October 18, 2006 @07:42PM (#16494359)
    Seems to me the Internet is starting to mimic other economic systems, such that it is now subject to the whole boom and bust cycle. Just that they call it a bubble. There will be many of them in the years to come.
  • Economic Growth (Score:2, Insightful)

    by dracocat (554744) on Wednesday October 18, 2006 @07:46PM (#16494395)
    If by bubble you mean a time of ecenomic growth, then yes we are headed there.

    The economy is on the upswing, and people (perhaps minus slashdotters) are generally optimistic.

    It is very possible to have ecenomic growth without a hyperinflated economy resulting in the proverbial bubble. After the economic growth will be a time of economic slowing and finally a recession of the economy.

    You can count on it, although unfortunately you can't set your watch by it. Timing of the whole thing is still not very precise.
  • by PepeGSay (847429) on Wednesday October 18, 2006 @07:47PM (#16494417)
    Rises and falls in every sector happen all the time. We don't need to over analyze every rise in the market like it's the second coming. Things will inflate and deflate over time in all areas. The fact is the first dot com bubble burst wasn't that big of a deal. It's not like we had soup lines. Some *speculators* lost money. Enterpreneurs in *speculative* businesses lost their jobs. Really, it had not delitirious effect other than to correct the market and kick out some losers that needed to be kicked out anyway.
  • by SRA8 (859587) on Wednesday October 18, 2006 @07:48PM (#16494433)
    During the first bubble, we had wild stock prices. Seeing that most of the new back of dot com's are not public, are we making this claim simply based on the purchase prices of a handful of private companies? Seriously, its nothing like the dot com boom of 2000, where hundreds of shell companies went for their golden IPO.
  • by Wills (242929) on Wednesday October 18, 2006 @07:52PM (#16494471)
    The more people talk about "the stock market bubble" and upcoming crash, the more people start expecting it and theb selling their stocks, which makes it more likely to happen.
  • Re:OMG! v2.0 (Score:2, Insightful)

    by 2.7182 (819680) on Wednesday October 18, 2006 @07:53PM (#16494491)
    Actually the best predictor is how many Herman Miller chairs your office has.
  • by mcrbids (148650) on Wednesday October 18, 2006 @07:56PM (#16494517) Journal
    WARNING: This post sounds remarkably like something written in about 1998. It's still true.

    The "digital marketplace" is fundamentally different than the standard "meatspace" environment. In cyberspace, product carries no mass. In many cases, intellectual property is "production grade" the moment it's written. EG: PHP code. There's no duplication cost, virtually non-existent distribution cost, and the result can be seen/used by millions overnight, if you have some servers to handle it.

    Note: the servers to handle "millions" can be surprisingly cheap, and getting cheaper every day

    So, while it takes an auto company years, and eleventy billion dollars to come out with a new line of cars, it takes maybe 2-5 guys consisting of a decent programmer, a few salespeople, and a book-keeper armed with a few thousand bux to develop a product usable by millions, even if they are working day jobs to pay rent.

    So this means that the boom/bust cycle can happen in 2-3 years rather than 2-3 decades.

    Get used to it - it's only going to accelerate from here. Ever heard of the technology singularity? [wikipedia.org]

    It's coming.
  • I agree- the bubble idea just makes it seem wierd. Unique. In reality, capitalism itself just isn't stable- it fails to have enough information transfer to become so.

    Anybody know of a stock trading BBS based on slashcode? In such a database may be a solution....
  • by DJ Jones (997846) on Wednesday October 18, 2006 @08:15PM (#16494707) Homepage
    Interesting question, and the answer is most likely far too simple for most bussiness executives to comprehend. I would attribute youtube's success to two simple, but important factors. One, they had a good-clean user interface, unlike similair publicly uploaded video sites. And secondly, and more importantly, they enabled even the most basic computer users to easily copy direct URL links to certain videos, essentially turning individual users into advertisers through social networking sites like "myspace".
  • Baby Boomers (Score:5, Insightful)

    by Anonymous Coward on Wednesday October 18, 2006 @08:15PM (#16494721)
    Baby Boomers all the way. The boomer demographic is the real bubble underlying stock prices, housing prices, etc. Those folks are in their peak earning years, and there are a lot of them. They are pumping HUGE amounts of money into 401Ks, pension funds, you name it. When they start dying, getting sick, retiring, the flow of money will reverse. They will be selling houses and moving into assisted living and nursing homes. They will be taking money out of their 401k instead of putting it in.

    Just because the dot-com bubble popped didn't cause these people to stop trying to squirrel money away for retirement. And since they never really saved the way they should, they're trying to make up for lost time by speculating in stocks. So the irrational exhuberance continues. Eventually, though, it will stop. And when it stops, the bubble will collapse in a very very big way.

    The fallout will involve all these folks whining about how the next generation should pump more money into SS so they can afford the affluent lifestyle to which they've grown accustomed. Screw 'em. The most irresponsible generation decided to give their life savings to the pinstriped crooks on Wall Street. That's their problem, not mine.

    Baby boomers are the big white elephant in the room that everyone pretends they can't see. Instead we have to endure all manner of ridiculous handwaving BS about new economies yada yada yada. Phghght. What a bunch of crap.
  • "Not a huge deal"? (Score:5, Insightful)

    by SuperBanana (662181) on Wednesday October 18, 2006 @08:20PM (#16494781)

    The fact is the first dot com bubble burst wasn't that big of a deal. It's not like we had soup lines.

    Wow, talk about revisionism. The first bubble burst was HUGE deal; dozens of major banks grossly violated their 'chinese wall' policies while underwriting the IPOs of clients and looked the other way when internet companies were engaging the shadiest accounting practices known to man. Companies swapped "shares" and both counted it as revenue based on projected stock prices, for example. Tens if not hundreds of thousands of people lost their jobs in "layoffs", and it had a massive ripple effect in places like SF. The crash and delisting of hundreds of "internet" companies destroyed "investor confidence" on the stock market, and affected all manner of investors, from individuals to massive retirement accounts.

    Christ, man! It was enough to destroy Arthur Anderson Consulting. Why do you think they're known as Accenture now? Having your top officers lambasted by Congressional investigators for conspiracy, fraud, etc on national TV doesn't exactly bolster confidence in a business where clients are trusting you...

  • Re:Economic Growth (Score:5, Insightful)

    by argoff (142580) * on Wednesday October 18, 2006 @08:23PM (#16494829)
    If by bubble you mean a time of ecenomic growth, then yes we are headed there.

    First off, the economy is not on the upswing. While we don't seem to have another dot.com bubble, we absolutely have a housing bubble and that is worse! If your stock tanks, you still aren't making monthly payments on it and it's a lot more liquid. The record low savings rates and record high debt rates are not symptoms of a healthy economy. Neither is the account deficit over 6%. So far the US is the only country in history to have that high of an account deficit and not have a currency collapse. The fact that it is increasing rapidly is not good. (BTW, I know it's political season, so let me just say it's not Bush's fault, but structural - for people who think I'm bashing Bush)

    It is very possible to have ecenomic growth without a hyperinflated economy resulting in the proverbial bubble. ....

    Not in the US, not since 1911, the year of the federal reserve act. You can't keep printing up money and loaning it into the economy and expect nothing bad to happen. In fact, the efficiency of the information age means that when the money passes thru, that adjustment will be far more extreme, not less extreme. The worst part is that the Fed thinks they have lernt the lesson of the great depression - that the solution is more liquidity. No it's not! It will just change it from a great depression to a hyperinflationary great depression. I don't think people have any idea what they're in for.

    Why is everyone so sureal. Any look at the numbers is just terrible, do people understand that the dollar can't make it as a global reserve currency for more than a few more years and likely can't make it as a currency at all within the next decade? Can your family afford a debt of about 480K that is increasing at the rate of about 30K per year? Well, between all the obligations and systemic debt it already must.

  • Re:OMG! v2.0 (Score:3, Insightful)

    by stevesliva (648202) on Wednesday October 18, 2006 @08:29PM (#16494903) Journal
    $500 is just a drop in the bucket for the cost of your average tech worker making $55,000 / year.
    $55000 is probably what your average tech worker's family healthcare premiums cost these days... now let's hope that chair's extra ergonomic.
  • Can't wait (Score:4, Insightful)

    by twistedcain (924116) on Wednesday October 18, 2006 @08:42PM (#16494999)
    The system needs a good flushing. The web (and tech in general) is a mess of useless, pointless crap. Thousands if not millions of websites offering pretty much the same thing. Good examples would be the youtube clones, youtube itself being one of course. One good blog to every 1,000,000 poorly slapped together ones. Useless Bookmark/social sites like bluedot. Webmasterworld, where 500 good question/answers have been repeated 5 million times. Digg, a place to visit adsense filled blogs with one or two lines of information and a link to the actual source of information, and never worry about missing one of these adsense filled blog posts, it will be repeated on the front page at least 10 times a day. Not even going to talk about MySpace and the clone army the venture capitalists will be sold into creating.

    As for tech, quit cock-teasing us and put together a phone with wireless internet, camera, mp3 player, video player, video recorder, gps, and 3d gaming. Get rid of the psp, gameboy, DS, ipod, palm, blackberry, blueberry, boysenberry, and so on.

    A bubble burst only effects the crappy businesses who use copycat ideas and whose only purpose was to make a quick buck. Good-bye and good riddence.
  • by timeOday (582209) on Wednesday October 18, 2006 @10:09PM (#16495815)
    It's not just Taco. Take a look at a ten year history of the Nasdaq [globeinvestor.com] and tell me we're in a bubble like 1999.

    If tech stocks are overvalued now, it's nothing like they were then. Now let's talk about housing [cepr.net], shall we?

  • by Anonymous Coward on Wednesday October 18, 2006 @10:45PM (#16496183)
    Christ, man! It was enough to destroy Arthur Anderson Consulting. Why do you think they're known as Accenture now?


    Accenture used to be Anderson Consulting, which is not the same company as Arthur Anderson. Also, Arthur Anderson was Enrons auditor, which might have had more to do with their demise than the bubble.
  • by a gash (891166) on Wednesday October 18, 2006 @11:49PM (#16496711)
    It's very simple. One, they paid for the bandwidth for people to distribute their videos. Two, they had a lax policy regarding copyright infringement.

Prof: So the American government went to IBM to come up with a data encryption standard and they came up with ... Student: EBCDIC!"

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