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Dot-Com Bubble v2.0? 200

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 ackthpt ( 218170 ) * on Wednesday October 18, 2006 @07:50PM (#16494451) Homepage Journal

    During the first bubble the hubris was so thick in the Silicon Valley air you could feel it. People around you virtually hummed with it. And like The Emperor's New Clothes, if you actually looked at some of the shiny bits you'd notice some what people where trying to sell was utter shite, a scam, not worth a penny, yet people bought their stock on IPO and it all went nuts. There was 'the big strategy', to develope something Microsoft, Oracle or Cisco didn't have and would want and to trumpet it all over the place and hope one of these big companies would make you an instant millionaire by buying you out. Didn't always work.

    Now I think most of what is going on in this bubble actually cuts the mustard in the ledgers. It pretty much has to. Too many (ad)venture capitalists got burned and they're a bit more careful now.

  • by Infonaut ( 96956 ) <infonaut@gmail.com> on Wednesday October 18, 2006 @08:53PM (#16495085) Homepage Journal

    There was no dotcom bubble and there won't be a new one.

    There was a tremendous bubble. I was there. I did work for companies that were almost entirely virtual. There was no "there" there. It was all hot air. I know plenty of people who suddenly had fantastic jobs and were living a lavish lifestyle, only to be out on the street looking for a job when the boom dropped on the bubble. Bay Area traffic noticeably thinned for at least two or three years. It definitely was a bubble, and when it popped, the effect was very painful to a lot of people.

    My guess is that while the average person on the street doesn't know the entire dotcom tale, they do know that there was a tremendous upsurge in the NASDAQ for a period of time, and that it was fueled by rampant speculation. This isn't the same thing as Starbucks overextending itself by opening 54 shops in Dubuque, rather than the 52 it can actually support. There was a huge outlay of capital, there were companies going public every day, and the stock market had lost all rationality. Even non-techies could see this. All they had to do was watch the news.

    This time it is different, in the sense that all of the Web 2.0 companies aren't going public. As another poster has already mentioned, this time it's private capital chasing after some good and many bad investments. When the majority of these companies die, John Q Investor won't take it in the shorts this time. In that sense, the Web 2.0 investment phenomenon is a lot closer to the normal course of business events you describe.

  • by Anonymous Coward on Wednesday October 18, 2006 @10:04PM (#16495739)
    hmmm, lets see what joel has to say about this [joelonsoftware.com]

    Let me, for a moment, talk about the famous Aeron chair, made by Herman Miller. They cost about $900. This is about $800 more than a cheap office chair from OfficeDepot or Staples.

    They are much more comfortable than cheap chairs. If you get the right size and adjust it properly, most people can sit in them all day long without feeling uncomfortable. The back and seat are made out of a kind of mesh that lets air flow so you don't get sweaty. The ergonomics, especially of the newer models with lumbar support, are excellent.

    They last longer than cheap chairs. We've been in business for six years and every Aeron is literally in mint condition: I challenge anyone to see the difference between the chairs we bought in 2000 and the chairs we bought three months ago. They easily last for ten years. The cheap chairs literally start falling apart after a matter of months. You'll need at least four $100 chairs to last as long as an Aeron.

    So the bottom line is that an Aeron only really costs $500 more over ten years, or $50 a year. One dollar per week per programmer.

    A nice roll of toilet paper runs about a buck. Your programmers are probably using about one roll a week, each.

    So upgrading them to an Aeron chair literally costs the same amount as you're spending on their toilet paper, and I assure you that if you tried to bring up toilet paper in the budget committee you would be sternly told not to mess around, there were important things to discuss.

    The Aeron chair has, sadly, been tarnished with a reputation of being extravagant, especially for startups. It somehow came to stand for the symbol of all the VC money that was wasted in the dotcom boom, which is a shame, because it's not very expensive when you consider how long it lasts; indeed when you think of the eight hours a day you spend sitting in it, even the top of the line model, with the lumbar support and the friggin' tailfins is so dang cheap you practically make money by buying them.
  • by RKBA ( 622932 ) on Wednesday October 18, 2006 @10:20PM (#16495933)
    You can also download YouTube and most other videos with the FireFox plugin at:
    http://videodownloader.net/ [videodownloader.net]

The shortest distance between two points is under construction. -- Noelie Alito