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Has the Second Dotcom Bubble Started?

Soulskill posted more than 3 years ago | from the bunch-of-bull dept.

The Internet 298

An article at the Guardian asks whether the exceedingly high valuations of social tech companies signify the arrival of a second dotcom bubble. Quoting: "Every week, one of the new generation of internet firms seems to attract a sky-high valuation. Zynga, the social-network games company that has tempted millions to grow virtual vegetables in its FarmVille game, has been valued at $9bn (£5.54bn). Profitless Twitter is said to be worth $10bn. Groupon, vendor of online discounts, rejected a $6bn offer from Google and is considering a flotation with a potential valuation of $15bn. Tech-watchers say this is just the start: the real boom will come when Facebook, the head boy of the new dotcom frenzy, goes public, probably next year. ... The last dotcom boom really took off after the flotation of the internet software company Netscape in 1995. Patrick says this time it's likely to be Facebook that lights the fuse. So far, private investors have been locked out of the New Thing. But JP Morgan is setting up a fund, and Goldman Sachs recently tried to get its clients' money into Facebook."

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298 comments

Picard Facepalm (5, Insightful)

Smidge207 (1278042) | more than 3 years ago | (#35278232)

The problems that monetizing free services like Facebook are largely as follows.

-The value of the product to users is determined by the number of your friends that use it. It's value to consumers massively diminishes if large swathes of your friends dont use it. Its the same reason I don't use MSN messenger anymore. That's actually a really great product, but I don't know anyone else who uses it, and that pushes its value to 0. What this effectively means is that Facebook cannot charge users for content. As soon as they do that, some people will leave, which pushes down the value for money that users who want to stay get. So they leave too. No future there.

-So if they can't charge, how do they generate income? As we know, its largely advertising revenue. That's true of Google, and Facebook, and any aspiring free products out there. The success of that model is difficult to predict. On the one hand, the amount of information about users that these companies can get is astronomical. It is certainly of use to advertisers, and they are probably willing to pay huge sums so that they can integrate that data into their systems for personalized adverts. On the other hand, I've yet to see personalized advertising systems which is accurate enough to be of value. I've never clicked any Google or Facebook ads because they have never hit anything that I would want. Until that gets addressed, there's not a huge future in that either.

Re:Picard Facepalm (0)

WrongSizeGlass (838941) | more than 3 years ago | (#35278274)

On the other hand, I've yet to see personalized advertising systems which is accurate enough to be of value. I've never clicked any Google or Facebook ads because they have never hit anything that I would want. Until that gets addressed, there's not a huge future in that either.

These companies have real value - Google's a huge company with a market cap of $202 billion as of this morning's opening. When this issues gets addressed these companies will be more valuable.

Re:Picard Facepalm (2, Insightful)

miffo.swe (547642) | more than 3 years ago | (#35278452)

Google is exceptionally good at balancing customer value with non-intrusive ads, very high moral fibers and overall being a bunch of really nice people. They understand their business model and manages to keep greedy bastards from running the show. As soon as someone like Elop gets the helm of Google its game over in matter of months.

Facebook will have to be very slick and discrete when they start moving ads or some other form of revenue. With millions upon millions of investors screaming for blood, thats not as easy as it sounds. It takes time and it takes finesse. So far Google is one of very few companies that has tried and not ended in complete failure.

Personally i expect Facebook to fail as soon as the next big thing rolls in whatever that may be, just as EVERY other form of social network has moved on until now.

Re:Picard Facepalm (2, Interesting)

postbigbang (761081) | more than 3 years ago | (#35278526)

High moral fibers? That's a dubious claim. Your thought of "really nice people" that somehow managed to keep (possibly other) greedy bastards from running the show is mischaracterized. They merely provide somewhat astute competition at the cost of your privacy, and therefore, your dignity.

Proliferating web content through subsidized advertising is much like how the TV industry let the ad sales people out of their cages, resulting in a proliferation of enormous quantities of total content blather. That evolutionary process seemed like growth, but because it panders to quantification rather than qualification of content, it made much of the web entropic.

Re:Picard Facepalm (0)

miffo.swe (547642) | more than 3 years ago | (#35278650)

If you compare Google and other search engines, Google comes out on top when it comes to privacy. If you compare how ads are displayed some have adopted Googles non-intrusive ads but thats only because Google has set the bar very high. Take Google away and we are back to search portals full of blinking ads like MSN in notime.

They have consistently done stuff that has hurt Google in short term but will benefit them in the longer run.

When it comes to advertising, Google is the equivalent of a free Program magazine for your tv channels that contains ads, Facebook on the other hand are ads in the tv-show.

Re:Picard Facepalm (1)

postbigbang (761081) | more than 3 years ago | (#35278748)

And how do you know this? There are a dozen search engines, and you really have no idea how much data Google stores, then makes available to sites. Google Analytics, while vastly resourceful, gets that way at the cost of immense amounts of YOUR data.

You give lots away and don't realize it. The Google model is built on robbing you of your privacy. You blithely ignore this, ready to get nibbles of content in sacrifice for the dignity that your privacy gives you.

Re:Picard Facepalm (1)

miffo.swe (547642) | more than 3 years ago | (#35279086)

Bullshit, Google have very crystal clear policies about what information they store and even has tools nobody else has that lets you control exactly what you let them save and what you want to erase. Only divert from that is what YOUR government requires of them by law.

The Google model is built around me sharing because i trust them with my data in a way i would never ever trust Facebook or Microsoft. The moment they break that trust they are done for and they are more aware of that than anyone else. They dont steal my data, i give it to them in return for their services.

Im personally much more worried about what governments and security services does with the data when they bargain away my data in return for some other poor sods data. Thats something i cant protect against in any way and there isn't an opt out, and there arent anyone i can hold accountable should the data be used to for eg. destroy my business by a foreign competitor.

http://www.google.com/intl/en/privacy/tools.html [google.com]

Add placement has nothing to do with privacy (1)

Errol backfiring (1280012) | more than 3 years ago | (#35278950)

Tracking has. Gathering and storing as much data as possible about you has. Driving around to get your wifi data has. If google is nice when it comes to privacy, the Ethiopian princess that asks for my bank account data is real.

Re:Picard Facepalm (2)

somersault (912633) | more than 3 years ago | (#35278470)

They currently have real value, but as Smidge was pointing out, this "value" is highly volatile. Google provides a variety of services that aren't that easy to duplicate.. but the content on Facebook is all user generated. Pretty much any web developer could make a social networking site. He may have to hire staff to help him scale up the back end to handle hundreds of thousands of users, but overall it's nothing particularly special in the technical dept. Twitter is probably best positioned to take it down if they added the ability to have private tweets among groups (maybe they already do that?).. and longer messages of course.

Re:Picard Facepalm (3, Informative)

vlm (69642) | more than 3 years ago | (#35278476)

These companies have real value - Google's a huge company with a market cap of $202 billion as of this morning's opening.

Thats hilarious placing "real value" and "market cap" in the same line. Market cap is nearly meaningless, its just the marginal price fluctuations times the number of outstanding shares. As if, in a thought experiment, you sold every outstanding share you'd be able to get the exact same price for the last share sold as for the first share sold, ha ha ha.

The actual real value of GOOG can be found at (where else?) finance.google.com, pull up GOOGs financials, click on balance sheet:

total assets 57851 - virtual made up junk slush fund accounting tricks like intangibles and goodwill -6256 -1044, subtract total liabilties 11610 and GOOG is really worth about 39 billion as of the end of last year.

Re:Picard Facepalm (5, Interesting)

vlm (69642) | more than 3 years ago | (#35278356)

-So if they can't charge, how do they generate income? As we know, its largely advertising revenue

And that brings up problem #2 that the last bubble happened in an inflationary flood of credit and generally increasing (at least nominally) incomes. In a deflationary environment, you can't grab a slice of the pie and watch it grow, even just to stand still you have to convince your customers (advertising agencies, etc) whom have a shrinking revenue stream, that their dollars are better spent on your dotcom ads than spent on TV commercials, print ads, billboards, whatever.

Every millisecond spent on facebook is a millisecond not spent at home depot or related pursuits, not spent eating at a restaurant, not spent buying a car or driving around... Computer product importers / retailers and ISPs are pretty much the only industries that are a good fit for facebook.

You want to reach car buyers so you can sell more cars, you put a billboard on the biggest interstate in town, you advertise on TV during nascar races, and you put print ads in a car magazine. You don't advertise to peasant subsistence farmers, real or virtual farmvillers. The real ones can't afford it, and the virtual ones are more interested in clicking mice than driving cars. Facebook, etc, is too old and too wide spread to dazzle them into investing in something "new", since everyone's had an account for years.

In other words its hard to bubble off shrinking advertising revenue that would be targeted to the wrong people anyway.

"msn messenger is a really great product" (3, Funny)

unity100 (970058) | more than 3 years ago | (#35278370)

why should we take the opinion of someone who utters such a sentence ?

Re:Picard Facepalm (4, Insightful)

vlm (69642) | more than 3 years ago | (#35278564)

-So if they can't charge, how do they generate income? As we know, its largely advertising revenue.

They could sell the aggregated data to every HR department in the world, every government at every level in the world, every private investigator / bail bondsman in the world, all the worlds credit bureaus, every private security firm in the world... Eventually as the bubble pops, they will HAVE to do so as they circle the drain.

Re:Picard Facepalm (2)

LordLimecat (1103839) | more than 3 years ago | (#35278772)

I've never clicked any Google or Facebook ads because they have never hit anything that I would want. Until that gets addressed, there's not a huge future in that either.

Ive had the opposite experience. As early as 2 years ago I was getting ads for things like rsync.net, thin client solutions, blade servers, virtualization solutions, and the rest.

Perhaps proper statistics are in order?

Re:Picard Facepalm (5, Insightful)

mcvos (645701) | more than 3 years ago | (#35278782)

Facebook's valuation is a real mystery to me. It's valued at $50 billion. It has 500 million users, which looks like a lot, but that puts it's worth at $100 per user. Do you think you are worth $100 to facebook? Do you know anyone who might be?

The value of a company is generally about 10 times its profit, so facebook should be making $5 billion profit a year, or $10 per user. And that should be profit, not revenue.

$50 billion is also about a third or a quarter of what really big companies like Google, Oracle, Apple and Microsoft are worth. Is facebook really that close to that league? I think anyone buying facebook stock at this price is insane.

Re:Picard Facepalm (4, Funny)

0123456 (636235) | more than 3 years ago | (#35279230)

It has 500 million users, which looks like a lot, but that puts it's worth at $100 per user. Do you think you are worth $100 to facebook?

If my experience is anything to go by, 400,000,000 of those will be spam users trying to scam you and 50,000,000 of the rest won't have logged on in six months.

dotcom bubble (5, Insightful)

devxo (1963088) | more than 3 years ago | (#35278234)

During last dotcom boom companies had no usable plan to get income. However, Facebook is advertisers dream with its extremely targeted advertising system, Zynga has a huge amount of casual players and both advertising and direct payment system and groupon receives good money from the stores. They all have business plan. They might have to work on them a little bit as they're still so new companies, but they definitely have one that work.

That's why it's not a second dotcom bubble - it's just that the masses have started using internet a lot more than before and web itself has changed.

Re:dotcom bubble (5, Insightful)

Anonymous Coward | more than 3 years ago | (#35278256)

That's why it's not a second dotcom bubble - it's just that the masses have started using internet a lot more than before and web itself has changed.

Not the Internet - Facebook. All this money stands or falls on the success of Facebook and that's a brand that's (hopefully) at it's peak. This isn't a dotcom bubble, it's a Facebook bubble.

How can money go to open source? (2)

h00manist (800926) | more than 3 years ago | (#35278820)

What would be interesting is to see if some investment can be directed toward funding open source. It's more than fair, a huge amount of these operations depend on open source. I favor setting up threshold pledge funds -- http://en.wikipedia.org/wiki/Threshold_pledge_system [wikipedia.org]

Re:How can money go to open source? (0)

Anonymous Coward | more than 3 years ago | (#35278882)

Profit is usually a goal for investors. How much profit is there in FOSS?

Re:dotcom bubble (5, Insightful)

Weezul (52464) | more than 3 years ago | (#35278290)

You know, houses are valuable possessions too, just like the various commodities that've made messy bubbles before. Any sectors of stock, bonds, commodities, or higher order derivatives can reach bubble proportions.

The economics of plenty (3, Insightful)

Colin Smith (2679) | more than 3 years ago | (#35278648)

Please define valuable.

You realise that they are knocking houses down because the supply of them is such that they are worth less than the loans which were taken out to build them.

Let me say that again, to emphasise the insanity. They are knocking houses down.

Despite all the poverty and homelessness, despite the trailer parks. Because for capitalism to function, supply must never meet demand. It is only by destroying perfectly good housing that the supply can be reduced, the remaining stock can be made more valuable and people can go back to their wage slavery in order to pay the mortgage.

 

Re:The economics of plenty (1)

drinkypoo (153816) | more than 3 years ago | (#35278760)

There are actually more homes than the total demand even counting the homeless and displaced, it was part of the housing bubble.

Re:The economics of plenty (1)

a_nonamiss (743253) | more than 3 years ago | (#35278804)

they are knocking houses down

[citation needed]

Re:The economics of plenty (1)

ElectricTurtle (1171201) | more than 3 years ago | (#35278962)

It's happening in and around Detroit especially, but all over the country too. Google [lmgtfy.com] is your friend you lazy wanker. Three of the top five results from that properly constructed query relate to the subject at hand. Learn2Search.

Re:The economics of plenty (-1)

Anonymous Coward | more than 3 years ago | (#35279172)

Fuck you Mr. too good google anything yourself. This isn't wikipedia you lazy, uninformed asshole.

Re:The economics of plenty (5, Insightful)

AlecC (512609) | more than 3 years ago | (#35278924)

Not necessarily "perfectly good". A structurally sound house in the wrong place is not perfect and not really good. In a way, this mirrors the soviet failure, rather than capitalist problems. The soviets assumed that if a factory was working at full speed producing whatever had been specified, it was doing good work. But producing obsolete or excessive goods is a net loss. If you could move houses from the rustbelt to the sunbelt, your observation might be true. But you cannot, and it is better to scale back the shrinking communities to a functional size than continue to mimic a city with four times the population.

(Or you can try to relocate jobs to where the houses are. if you succeed in that, your fortune is made, just on the lecture circuit).

Capitalism depends on waste (1)

h00manist (800926) | more than 3 years ago | (#35278984)

Socialism is dead, and capitalism is the walking dead. For capitalism to function, more stuff must be continually made and sold. It doesn't really matter what the stuff is, but stuff has to be sold constantly, in large amounts, consuming work/jobs, material, transport, put the whole socity to make stuff. Nobody cares what the stuff is. That's only possible if the stuff doesn't last very long. If everyone produces garbage, stores garbage, transports garbage, advertises garbage, buys garbage, and makes money on garbage, it's OK, because everyone is employed and busy and the economy is working. What the stuff is doesn't matter, it's entirely secondary and unimportant. The more waste there is, the more stuff needs to be produced. Waste is not only good for capitalism, nowadays capital basically depends on waste. While there is still no well known, easily adopted replacement for capitalism, and socialism clearly shows it doesn't work either, inisiting on what doesn't work at this point is only holding back imagination to invent other work distribution and reward systems that would be better. Socialism is dead, and capitalism is the walking dead. The future needs imagination and courage to abandon the dead.

Re:dotcom bubble (1)

guruevi (827432) | more than 3 years ago | (#35278912)

They're not all that valuable, they're an investment. My house I just bought for 1/5th the cost to build a new one. Gutting it would cost me more than what's in it as regards to copper, wood and stone. I pay about as much in mortgage, taxes and insurance than the average rent around here. It's an investment for the time I either stop paying mortgage or sell it again. The housing market is murderous around here with houses going within days of being on the market and usually fetching 20k+ more than the estimated values.

Re:dotcom bubble (0)

Anonymous Coward | more than 3 years ago | (#35278310)

During last dotcom boom companies had no usable plan to get income. However, Facebook is advertisers dream with its extremely targeted advertising system, Zynga has a huge amount of casual players and both advertising and direct payment system and groupon receives good money from the stores. They all have business plan. They might have to work on them a little bit as they're still so new companies, but they definitely have one that work.

That's why it's not a second dotcom bubble - it's just that the masses have started using internet a lot more than before and web itself has changed.

And how successful is this targeted advertising system? It _should_ work, but people on FB aren't interested in the ads. Doesn't work for small or big businesses.

Re:dotcom bubble (4, Insightful)

commodore6502 (1981532) | more than 3 years ago | (#35278322)

>>>Facebook is advertisers dream with its extremely targeted advertising system

I thought Facebook and other sites like it were still losing money hand-over-fist. THAT is what caused the last crash - when people realized these companies were not earning any money, and quickly fled the stock, leaving to the Clinton-era downward tumble.

And this time I bet traditional media like magazines & newspapers & online e-zines will also disappear. Some will survive; most will not.

The whole 1900s-era system of making billions from mass media (magazines, radio, tv) is collapsing as the "masses" fragment and go in different directions across the web. Look at TV ratings - a top show in the 70s used to be watched by 40% of America. Now it's downto 7-8% with nets like CW scrapping the bottom at only 1%.

The other ~95% of americans are doing something else.
Things are bad. (For them. Good for us.)

Re:dotcom bubble (4, Informative)

definate (876684) | more than 3 years ago | (#35278474)

Facebook '09 revenue neared $800 million...The company also earned a solid net profit, in the tens of millions of dollars last year, one of the sources said. [reuters.com]

Yes, losing money hand-over-fist, if by that you mean, making money hand-over-fist. In other words, they (as far as we can tell) are extremely fucking profitable.

Re:dotcom bubble (2)

Crayon Kid (700279) | more than 3 years ago | (#35278682)

[...]they (as far as we can tell) are extremely fucking profitable.

I wouldn't call a few tens of millions profit "extremely fucking".

And there's a huge discrepancy between the $700-800m revenue with a low few tens of millions margin, and the unofficial "valuation" of Facebook at a high few tens of billions.

I'll be the first to admit I'm crap at economics but in my simple world I use simple math. If the yearly profit you can expect from a business is N, where does the valuation as 20xN come from? What's worth 19xN? The brand? Fixed assets? Potential for expansion? We're talking figures that (on paper) are starting to approach a trillion. Come, now.

The IPO, if and when it happens, will give us actual figures. But I can't help noticing that Facebook, Zynga et al. keep postponing them IPO's over and over.

Re:dotcom bubble (2)

Dragonslicer (991472) | more than 3 years ago | (#35278852)

If the yearly profit you can expect from a business is N, where does the valuation as 20xN come from?

Even I can answer that one. Usually you don't invest in or buy a business for only one year. If you pay 20*N for a company, all you have to do is keep the profits steady for 20 years, and you've gotten your money back. If you don't suck at business (which you and I do), you can increase their profit and make your money back in a lot less than 20 years. If you really are in it as a long-term investment, then you can keep your ownership for 30 years, and most likely have double what you originally paid.

Or you can do what appears to be fashionable these days and destroy the long-term viability of the company for a one-year profit boost, then dump it on someone else who isn't smart enough to realize that the company is about collapse.

Re:dotcom bubble (0)

Anonymous Coward | more than 3 years ago | (#35278868)

If Facebook is valued at $50billion and it's making some tens of millions (lets say $50million) then N in this case is 1000 !

Clearly potential investors will be playing a long game to recoup their money ;-)

Re:dotcom bubble (3, Informative)

definate (876684) | more than 3 years ago | (#35278874)

I'll be the first to admit I'm studying a double degree with an honours in economics, a bachelors in finance, and I'm picking up all the courses required to be an accountant (do the CPA).

This article was reporting on 2009's revenue (assuming it means 2009-01-01 to 2009-12-31, and not an FY measure) and given Facebook was started in February 2004 [wikipedia.org], and given this is money in the door, 5 years for ANY start up to be profitable, is quite extrodinary, and more so revenue that high. While you could point to other companies which had similar runs, these are extreme exceptions in this industry.

Tens of millions in the early years of a company, and additionally such high turn over, is an extremely good sign. Depending on the modelling these people are using, a valuation of tens of billions can be rationalized. Whether or not it is.

Please note valuation functions are hardly ever simple ratios, while they might be used as one input, or as estimators of other variables, but a profit ratio is unlikely, as its highly affected by different accounting treatments. People outside the company may use this, but can't use it for comparison, or as a reasonable estimator. You'd be better off with a revenue ratio instead.

A simple world, with simple math, to me is the constant growth model. Given they haven't distributed a dividend, and are high growth, we'd likely use free cash flow (but that's also probably highly subjective and unstable), a high growth (a measure of standard deviation would be simplest), and a cost of capital (given you're valuing the firm, and not the equity, something like WACC).

This is an extremely simplistic model, and yet it's immensely more complicated than yours.

If I were valuing this company, I'd be more interested in how its being run, potential future prospects, and whether it could fit in my portfolio well.

IPO's aren't the only way to go, in this instance if they are profitable, can hold on, and are willing to bare the risk, then why would they sell now? Given they didn't need an extreme amount of cash for investment. The life cycle of a company, which doesn't necessarily reflect tech companies well, but could be handy here, shows a company doing R&D, starting, growing rapidly, and smoothing off to become stable. At present they'd be in the rapid growth phase, and if they can fund it internally, they stand to make a LOT more money in the end.

Re:dotcom bubble (0)

Anonymous Coward | more than 3 years ago | (#35279190)

One sincere question, how do you value potencial future prospects for a business model that didn't exist five years ago and is becoming profitable barely right now?

Re:dotcom bubble (0)

Anonymous Coward | more than 3 years ago | (#35278970)

I'll be the first to admit I'm crap at economics but in my simple world I use simple math. If the yearly profit you can expect from a business is N, where does the valuation as 20xN come from? What's worth 19xN? The brand? Fixed assets? Potential for expansion?

Yes, yes, and yes. Annual profit does not equal the valuation of the company; it merely shows the annual growth of the company. Simple math time: y = mx + b. The m in this case is the $10 million profit. Assuming a linear profit slope, you need to look at two more variables to find y: its base assets and time.

That said, I don't know if those other two variables actually add up because I do not have any insight into Facebook's true asset tally. However, it is not outside the realm of possibility for the reasons I just mentioned.

Facebook not worth as much as people think. (4, Insightful)

chemicaldave (1776600) | more than 3 years ago | (#35278936)

Facebook 09 estimated revenue is indeed $800 million...yet Goldman Sach's offer could place the total value near $50bn. That's laughable compared to Groupon, who saw profits around $350 million, yet were only offered $6bn. If Facebook really is worth $50bn (it's not) then Groupon was right to reject the offer. Hell, that $800 million is only revenue. I'm sure it's probably not by very much, but their income is going to be less.
The smart investor won't dump money into a company so overpriced as Facebook when you look at the money they can get. Besides, how long will it be until Facebook is unseated? 5, 10, 15 years?

Re:Facebook not worth as much as people think. (2)

definate (876684) | more than 3 years ago | (#35279048)

Valuations are often EXTREMELY sensitive to the measure of expected growth. As such, if Facebook had an high estimated growth, where as Groupon (which I've never heard of) had a low estimated growth, then this would dramatically change their valuations, given they're similar companies with similar costs of equity/capital.

At the moment Google has a market capitalization of 198.58b, and while Google has an easier monetizing job (I think) than Facebook, and a longer history, we should notice that Facebook has similar traffic to Google [google.com.au], possibly even more. Not sure if this is throughput or hits though.

So without more research, while $50b is high, it can be rationalized, and may not be insane. Not to say that it isn't insane, but it might not be. Especially if it occupies only a small portion of your portfolio, and the investment is syndicated amongst many investors.

Re:dotcom bubble (1)

VolciMaster (821873) | more than 3 years ago | (#35278722)

>The whole 1900s-era system of making billions from mass media (magazines, radio, tv) is collapsing as the "masses" fragment and go in different directions across the web. Look at TV ratings - a top show in the 70s used to be watched by 40% of America. Now it's downto 7-8% with nets like CW scrapping the bottom at only 1%.

1% of ~320 million is still a lot of people, though :)

Re:dotcom bubble (1)

h00manist (800926) | more than 3 years ago | (#35279030)

As far as I can tell, the Internet found its funding model. Television. Tons of empty, pointless, inoffensive and bland "content", paid for by the real boss - advertising of worthless products. Millions of sites stand up for no purpose other than for the walls to hold up ads.

sure (2)

spectrokid (660550) | more than 3 years ago | (#35278340)

Apple is worth how many times their yearly profit? Thirty-something? Meaning if I buy a share I will statistically start making a profit when I'm 75. For Facebook it will probably be 156. Don't get me wrong, Facebook will in time become a huge money-machine. But the first investers will be one-cell brained "Facebook is big: must buy" kind of people. The more I learn to know bankers, the more I despise them. We are warming up for the next round of "let's kill people savings for fun".

Re:sure (4, Informative)

varcher (156670) | more than 3 years ago | (#35278508)

Apple has currently a PE (Price-Earning) ratio below 20 (19-19.5).

It's well outside of speculative range, like any stable company with relatively little unknowns (barring Steve's health).

Re:sure (1)

Dhalka226 (559740) | more than 3 years ago | (#35278628)

That's because you're under the illusion that making money in the stock market involves the company you're investing in doing well. It's quite possible to make boatloads of money on stocks for companies with no futures.

With growth companies like Facebook and even Apple, you make money by buying stock and selling it for more. Buy Facebook stock on day one and you are going to make money -- guaranteed. How much will depend on how good you are at figuring out what the curve is going to be like and when the value is nearest its peak. People who buy stock at the peak are going to lose money.

There are companies like you're thinking of; companies like Microsoft pay a share of profits in the form of dividends, meaning the money you make is directly proportional to the money the company makes. Of course if you're good at buying low and selling high you can make extra money there too, but companies who pay dividends tend to have more stable investors: They're making near guaranteed money while they own stock, and while they can make a big chunk by selling they give up that income stream.

In short, the first investors aren't "one-cell brained" at all. They're the smart ones. People who come after them may or may not be smart depending on where in the peaks and valleys they enter.

Re:sure (5, Informative)

necro81 (917438) | more than 3 years ago | (#35278634)

It takes all of five seconds: Apple [google.com]'s P/E ratio has been 18-20 for a while now. This morning it's 19.57. It's stock price has risen a lot in the last few years, but it has also been making and selling products like mad, and making huge amounts of profit (not just revenue) in the process.

If we're talking about P/E, let's make some comparisons:

Ford [google.com] 9.42
MS [google.com] 11.47
Acer [google.com] 13.18
IBM [google.com] 14.24
Medtronic [google.com] 14.25
Pfizer [google.com] 18.74
Google [google.com] 23.96
Verizon [google.com] 40.67
Netflix [google.com] 79.48

So, in short, there's a wide range of P/E ratios among viable (and profitable) companies. Apple's P/E puts it a bit on the high end, but not wildly so. It is relatively cheap compared to, say, the P/E of the entire S&P 500 [multpl.com]. P/E is just one contributor that guides whether to buy or sell a stock.

Where you might be able to make an argument is that most of the established companies, particularly those with P/Es at or below AAPL's, pay out dividends, and that's one main way investors make money off them. The yield is typically 1-2% per year, so you'd still be waiting decades to earn back an investment through dividends alone.

Apple doesn't pay a dividend, and never has, so the only way to make money on it is to buy low and sell high. If you'd snagged it years ago, before the introduction of the iPhone, for instance, then sold today, you'll have made a boatload, several times what you put in. And that isn't a Ponzi scheme: you owned a share of a profitable company, and that company grew because it generated new business and made money doing so. The potential for making that money by riding a company's growth is a contributor to P/E. Apple has a good track record of breaking into new business and expanding, so its P/E is a bit higher. Ford is unlikely to capture a brand new and rapidly growing market sector, so its P/E is lower.

Far different from last bubble (3, Informative)

walterbyrd (182728) | more than 3 years ago | (#35279008)

During the last bubble, 3 digit, and even 4 digit, P/Es were not all that unusual. Most of those companies listed in the parent post, have P/Es around 20. If this is a bubble, it's certainly nothing like the last bubble.

Re:sure (2)

bay43270 (267213) | more than 3 years ago | (#35279020)

Nice post. 1 minor nitpick though. According to Google finance, Apple did pay a dividend up until the mid 90s.

Re:dotcom bubble (1)

dmgxmichael (1219692) | more than 3 years ago | (#35278374)

During last dotcom boom companies had no usable plan to get income. However, Facebook is advertisers dream with its extremely targeted advertising system, Zynga has a huge amount of casual players and both advertising and direct payment system and groupon receives good money from the stores. They all have business plan. They might have to work on them a little bit as they're still so new companies, but they definitely have one that work.

Heh heh yup. Petz.com anyone?? Until we start seeing stupid sites that blatantly have no means to gather income showing up in droves again I think we're safe.

Re:dotcom bubble (0)

Anonymous Coward | more than 3 years ago | (#35278636)

I think it's more than that; I think it's the fact that there is either a stable business model (Facebook, Zynga) or a potential stable business model (Twitter). The dot-com bubble happened because everyone thought these stores would make a ton of money because of no overhead, which thought that every dot-com would make a killing selling anything. Facebook I think is terribly overvalued at $50B because it's earnings are only $1.2B (I think), giving it a P/E of about 42. That's really high; it depends on the industry but a P/E should be around 20 or so; 15 on a solid company is a good buy. But it's not like the dot-coms where most of them had a revenue of $0.

Re:dotcom bubble (1)

kmdrtako (1971832) | more than 3 years ago | (#35278646)

There are ads on Facebook?

Oh yeah, I see them now – now that I'm looking for them. (Ditto for google.)

Who knew.

That doesn't change much (1)

MikeRT (947531) | more than 3 years ago | (#35278786)

The problem is that these valuations are likely not at all realistic for what these companies are making. I would bet that Twitter's revenues are about 1/100 of its market valuation. When you have a company that is that highly priced relative to its revenues, you are basically playing cards at a casino where Goldman Sachs is the one that controls the house.

IANASB (IANA Stock Broker), but I wouldn't touch these companies with a ten foot pole if these are their prices when they hit the market. I know people who did that with RedHat and got burned very badly...

You're right, they do have viable business plans, but I'd be shocked if their plans were viable enough to maintain those stock prices for more than a year or so.

Re:dotcom bubble (1)

gl4ss (559668) | more than 3 years ago | (#35278930)

this is like the 4th bubble, with zynga it's about flash games, which have bubbled several times already.
the mobile bubble has burst few times already too.

zyngas business plan isn't really long term though, what I mean with that is that it could very comfortably support a staff of say 40-50 people for many years to come, but I don't really see it as something that has the value of 10 billion, quite simply because it wouldn't take 10 billion to prop up another zynga. and if they're profitable and with a positive money flow, wtf do they need investments for? that's actually the biggest bubble indicator: that the value hasn't sprung up from the company itself but by other people putting their bets on the company.

when a company that should have a nice positive cash flow instead of leveraging that goes on an investor luring spree then you know that they're doing something wrong.

Re:dotcom bubble (2)

xgr3gx (1068984) | more than 3 years ago | (#35278940)

Facebook is an advertisers dream. I don't think it could be any more perfect from an advertisers perspective, and I'm sure facebook charges a premium for this kind of consumer data. However, targeted advertising only works when there are targets...what happens when/if facebook goes the way of Myspace and Live Journal (not that LJ was a behemoth like facebook or myspace).
  It seems like myspace was king for a few years, then tanked and facebook filled the void. I'm not sure what caused myspace's drop in popularity, but one has to wonder if facebook will see the same thing. Seeing as how "every one" read - everyone's parents/grandparents, are on facebook, you have to wonder if the people who fueled facebook's uprising (the college age crowd) will packup and move to the next big social net where nobody's parents are there to see the kind of debauchery in which they take part.
Then facebook is left with millions of square feet of data center space filled with thousands of idle servers. Cell phone company stop bundling facebook apps out of the box, and companies and news stations no longer update their facebook pages, because they too have moved on to follow the masses to next big thing.
If I were to invest in facebook, I would ride that wave for a very short time. Maybe I'm wrong, the world is much different than it was in 1999.

Re:dotcom bubble (0)

Anonymous Coward | more than 3 years ago | (#35279156)

During last dotcom boom companies had no usable plan to get income. However.... They all have business plan.

That's why it's not a second dotcom bubble - it's just that the masses have started using internet a lot more than before and web itself has changed.

It doesn't have to have the same underlying causes as the last bubble for it to still be a bubble.

let's hope so (2)

corbettw (214229) | more than 3 years ago | (#35278246)

I hope this happens for two reasons. One, after everything that's happened in the last 15 years, investors seem primed to look for bubbles wherever they can find them. It's been looking like Treasuries might be the next Big Thing; if that happened, it would accelerate the destruction of the dollar. I'd much rather speculators charge after some stock than my country's currency.

Second, my career really started at the beginning of the last bubble. Maybe a second one bring in some new blood to the industry, especially my step-son (who'll be graduating college in two years and is gonna need a job).

Re:let's hope so (1)

Weezul (52464) | more than 3 years ago | (#35278308)

Isn't a treasury bubble kind like gold bubble? Just some bear party

see : http://28.media.tumblr.com/tumblr_lgda4dt4HE1qbvce2o1_500.jpg

Re:let's hope so (0)

Anonymous Coward | more than 3 years ago | (#35278510)

Maybe a second one bring in some new blood to the industry, especially my step-son (who'll be graduating college in two years and is gonna need a job).

Yeah, let's hope for a bubble. Otherwise people would have to get jobs doing something useful.

Re:let's hope so (1)

vlm (69642) | more than 3 years ago | (#35278652)

Maybe a second one bring in some new blood to the industry, especially my step-son (who'll be graduating college in two years and is gonna need a job).

Yeah, let's hope for a bubble. Otherwise people would have to get jobs doing something useful.

Those jobs were mostly exported to China and India, or at least forced out of the US for one reason or another. Its bubble-job, mc-job, or unemployment for the next generation.

Valuation Bubble (1)

chubachub33 (1083745) | more than 3 years ago | (#35278248)

I think a better name would be The Social Valuation Bubble.

Re:Valuation Bubble (1)

miffo.swe (547642) | more than 3 years ago | (#35278598)

Exactly, the bubble is about communication and any such method has been rapidly succeeded with something else. The value of such company should be based on the volatility of the users taken in for consideration.

Probably, yes... (5, Interesting)

RogueyWon (735973) | more than 3 years ago | (#35278252)

It's not often I agree with a piece in the Guardian, but on this occasion, I think they're onto something. I remember the build-up to the first dotcom bust and a lot of the signs are showing up again. The over-valued floatations of profitless companies are certainly the most obvious of these, but there's a lot more than that out there if you want to look for it. Most worrying for many slashdot readers (though not for me with my nicely non-IT-based job), I'm starting to see the same kind of rush towards IT and computer-science based courses that we saw in the 90s, as the area became seen as a good route to "get rich quick". More competition for jobs and downward pressure on wages on the way.

Actually, I think the Guardian article is, in some ways, a little under-stated. It assumes that we're about to see the start of the bubble, which will begin in earnest with a facebook floatation. I suspect that we're actually a bit further along the cycle than that - already well up on that bubble and waiting for it to burst.

Of course, things won't be absolutely the same this time as they were in the original boom. I think the first boom and bust was characterised by a lack of understanding over what the public actually wanted out of the net. Pretty much everybody who was a significant online presence in those days was a new startup of one form or another and what the bust really did was sort out the wheat from the chaff. The businesses who had hit upon a successful model - like Amazon - came through it just fine. Meanwhile, the likes of Boo.com were exposed as fundamentally unviable - the public weren't remotely interested. It's worth remembering that outside of a small number of finance types and journalists, nobody was actually even looking at the sites of most of the victims last time. I was a heavy net user at the time and I remember seeing these huge IPOs for companies that I hadn't even heard of.

This time around, I think there's a better understanding of what people are interested in. The problem this time isn't the "everything dotcom is exciting" myth that we had last time. Rather, it's the "this is popular, therefore I must be able to make it insanely profitable" myth. The huge valuations are being attached to companies that have already undergone some fairly extensive testing in the court of popular opinion. The problem, however, is that that popular isn't the same as profitable and, I think, the lessons of the last 15 years or so indicate that making them profitable (at least to a degree that justifies the IPO) will likely not prove possible.

Advertising isn't going to do it alone in most of these cases. Sure, advertising is always going to be part of the online economy, but it's been proven time and time again that it isn't a silver bullet - not least because so many people these days just block it. At some point, a lot of these businesses are going to be pushed in the direction of starting to charge for content or services that they have been offering for free. And in a world where people have been used to having these things for free - and where free alternatives will still exist - I don't think that's going to work. Particularly not for social networking enterprises like these, where a lot of their value hinges upon the fact that everybody you know uses them. Some companies may fare better (just as some did in the first bust) - those selling casual games, for example - because they're already extracting revenue from customers.

I just ask a simple question: "Is this company selling a product that people will buy?" If the answer's no, then the company's story probably isn't going to have a happy ending.

Re:Probably, yes... (2)

dmgxmichael (1219692) | more than 3 years ago | (#35278388)

You're exactly right on popular != profitable. Has 4chan ever made a profit? Or for that matter, does slashdot? (ducks for cover)

How to tell the top. (0)

Anonymous Coward | more than 3 years ago | (#35278464)

he problem this time isn't the "everything dotcom is exciting" myth that we had last time. Rather, it's the "this is popular, therefore I must be able to make it insanely profitable" myth.

As they touched on in TFA, everything "Social Media" is hot now.

When we start seeing every website and business idea doing contortions to fit into the "social media" category, that will be the top of the bubble.

Re:Probably, yes... (1)

guruevi (827432) | more than 3 years ago | (#35278982)

Actually, right now is a really good time to get an IT job. It's only after the bust that the competition comes. The bubble companies need people and the companies feeding into the bubble need people to feed their stuff into the bubble. There is large demand for people to help inept CIO's move their servers into the cloud. There will be large demand to move them back right before the bubble bursts.

So freshen your resume's and get some experience if you have it. If you want to get a stable job, advise against this cloud bubble and reap the benefits in the long term.

How the Bubble Bursts (0)

Anonymous Coward | more than 3 years ago | (#35278254)

So Facebook goes public, and lots of private entities invest in the company. Investment returns are based on profitability, and profitability will be based on using user's uploaded information for specific advertising. "Social gaming" will tie in as well.

I think this will blow up in Facebook's, erm, face when users get tired of having their personal data being used by corporate entities. There are some open source alternatives surfacing (e.g. Diaspora, etc.) that can potentially cut out the corporate bloat.

Users jump ship to a better platform, and Facebook (along with its 3rd party application developers) is left with the pieces. And angry private investors.

Re:How the Bubble Bursts (1)

fuzzyfuzzyfungus (1223518) | more than 3 years ago | (#35278332)

Is there any evidence to suggest that Facebook, as a privately held company, isn't already whoring out every bit of their precious "social graph" that someone will pay them enough for? It is definitely the case that public status and next-quarter-driven shareholders can drive a company to evil; but I'm pretty sure that Facebook has already arrived at evil by limo and is currently lounging by the pool and sipping a drink with Zynga...

Re:How the Bubble Bursts (2)

varcher (156670) | more than 3 years ago | (#35278596)

Is there any evidence to suggest that Facebook, as a privately held company, isn't already whoring out every bit of their precious "social graph" that someone will pay them enough for?

I doubt this.

Selling your primary resource (the social graph) to outsiders is creating your own competitors: once I have your data, why do I need to pay you more?

Facebook isn't selling their data. They're selling placement of your data (ads, mostly) on their social platform. The facebook customers (the users aren't customers, they're marketing dangled in front of the real customers) thus get to keep paying Facebook for "use" of the social network.

Re:How the Bubble Bursts (2)

vlm (69642) | more than 3 years ago | (#35278676)

Selling your primary resource (the social graph) to outsiders is creating your own competitors: once I have your data, why do I need to pay you more?

Live feed. Extreme example: Egypt would have paid a lot for a live private facebook feed. Who could possibly know, maybe they did?

Not so extreme example: Local cops pick up a punk, need to find out his current accomplices, not his buddies from half a year ago.

Re:How the Bubble Bursts (1)

Weezul (52464) | more than 3 years ago | (#35278480)

Microsoft has never returned to it's peak during the previous bubble, but Google and Apple surpassed theirs. And all these faired better than WebVan and VA Linix. And even though faired better than Enron, well sorta.

I'd imagine the social networking bubble will see some strong survivors, like facebook and twittr, along with al the flameouts like Tuenti. Investors will painfully learn that facebook has limits of course.

yes (-1)

Anonymous Coward | more than 3 years ago | (#35278262)

facebook isn't worth 50 billion by any sane valuation. 50 million would be a stretch given their gross and net.

remember what to do when everyone says "but this time it is different" ? sell out.

all tech companies go to $2

Here Comes Another Bubble (3, Funny)

Anonymous Coward | more than 3 years ago | (#35278300)

http://youtu.be/I6IQ_FOCE6I

Sell short (0)

Anonymous Coward | more than 3 years ago | (#35278346)

Put your money where your mouth is. Sell short.

Separate fools and their money (3, Interesting)

johnjaydk (584895) | more than 3 years ago | (#35278362)

Wall Streets (and the market in general) function have always been to separate fools from their money. Now we have a bunch of fools who missed out on the first dot-com. They too need to be separated from their money.

Re:Separate fools and their money (3, Insightful)

fuzzyfuzzyfungus (1223518) | more than 3 years ago | (#35278414)

The problem with them is that they've become excessively efficient at doing so. Casinos, the other high-profile fool devaluation institutions, at least operate on the comparatively honest principle that you have to go inside and put your money on the table in order to lose it...

no stock market this time, all private investors (3, Interesting)

circletimessquare (444983) | more than 3 years ago | (#35278376)

the rush of the lemmings is all done by rich, well-connected investors this time around, a select few, rather than mom and pop investors like last time around. there has been a trend away from going public in recent years, and sticking with private investors. why deal with the SEC and obsessing over stock market valuation? the stock market is becoming a thing of the past. which is part of a larger story away from the citizen investor and a return to the days of plutocrats and a class structured society, the death of the middle class

so, since dot-com crash 2.0 is all about rich assholes losing their money out of blind greed, i ready my world's tiniest violin

Bubble in mobile (1)

js3 (319268) | more than 3 years ago | (#35278384)

I think there is a huge bubble in some tech sectors, especially mobile. There is huge money being dumped into this sector but I see little ROI in the end.

Re:Bubble in mobile (0)

Anonymous Coward | more than 3 years ago | (#35278826)

Exactly spot on about mobile.

For the early movers they are probably doing 'okay'. There is probably some room for more cool applications. But you are fighting amongst thousands of others.

Lets say I price my app at 2 bucks (not totally out of line). I then owe my distributor 30 of that. Leaving me with 1.40 gross profit per unit. Uncle sam and my state will want their take (as I am a small business it is going to be high at 25% as I do not have many deductions and need to pay myself 6% ss, 401k, insurance, etc). Leaving me with about 1.05 per unit sold. I can get a job for about 80-100k. To replace this job I need to move PER month at least 4200 units. Also on top of that if you are running any sort of data service you need to pay for that.

I hear most are moving 50-200 per month. You get to thousands if you are 'free'. It is why in this market you are seeing many amateur efforts. Oh there are good apps out there. But there is a sea of junk. Most of the ones that are well positioned are games, media resellers (netflix, amazon, b&n, etc), and location enhancement (such as scanners, where am i, maps, etc). There is a huge market of copycats too. Then while 'everyone' may be using your app did they pay for it or do they have a rooted phone?

As long as enough rich idiots ... (1)

Viol8 (599362) | more than 3 years ago | (#35278434)

...are parted from their money , whats the problem?

Seriously , if anyone genuinely thinks Facebook or Twitter are worth billions then then they deserve to lose every penny they have. Its not like there arn't recent lessons from history to learn from. Friends Reunited (remember that?) was bought for hundreds of millions by ITV and was sold essentially worthless a few years ago as the Trenderati moved on to the next shiny online bauble.

That's not a bubble. That's a cloud! (1, Troll)

Colin Smith (2679) | more than 3 years ago | (#35278482)

See QE 1 and QE2 for the reason behind the US bubble economy. The money has to go somewhere once it has hit the banks and they get to buy into lots of shiny toys.

It's worth getting in at the bottom of these things, but watch for the burst.
 

Pump it up (1)

UnixUnix (1149659) | more than 3 years ago | (#35278490)

Is a bubble coming? Well, is a valuation something passably sophisticated -- or is it a version of "Facebook has 500 million users... how much is a user worth?...oh, say, 100 bucks... presto, $50 billion!"

Maybe Google's IPO idea of "e * appropriate power of 10" lends a false air of accuracy -- all those digits! Not pulled out of thin air either.

PS. Ads? What ads? Facebook has ads?!?

Re:Pump it up (1)

History's Coming To (1059484) | more than 3 years ago | (#35279178)

That's why I'm not on Facebook. As the people who don't have an account decrease the data associated with those people will become more and more valuable until they're willing to pay big money to find out who won't use them and why, then I cash in. OK, it's vastly unlikely to happen, but I'll be gambling on exactly the same thing as the investors, and from a no-lose situation.

Question Headline (1)

Anonymous Coward | more than 3 years ago | (#35278544)

Can a journalist say anything they want as long as they put a question mark after it?

Re:Question Headline (0)

Anonymous Coward | more than 3 years ago | (#35278948)

Well noted! :)

Netflix (4, Interesting)

iONiUM (530420) | more than 3 years ago | (#35278570)

I'm surprised that this article didn't cover what is probably the most obvious example of a bubble stock: Netflix. While Netflix is indeed making money, they are not making (nor have the potential to make, due to various reasons) what their stock is currently valued at. But, the problem is people think "oo netflix that's the way of the future, not old fashioned cable providers" and they pump their money into it.

There are many articles about Netflix being a bubble, but here's the first one I found off of Google which summarizes a portion of the problem: bubble [stockinfo.co].

I think the difference between the last .com bubble and this one is that in the last one, companies had no way to make money, whereas in this one they are making some money, just nowhere near the crazy valuations that investors are giving them. The mindset is the same as last time, but the implementation is somewhat different.

The biggest bubble, these days is IP (1)

Yvanhoe (564877) | more than 3 years ago | (#35278728)

Think about it : some companies are evaluated directly over the number of software patents the own. They buy those for sometimes millions. What do you think will happen when the market discovers it has no inherent value ?

Groupon customers not good in the long run (4, Insightful)

Morris Thorpe (762715) | more than 3 years ago | (#35278770)

Groupon seems to me like one of those ideas we'll look back in retrospect and think, "Why was it worth that much? It was so obvious!"

The idea of landing a big number of first-time customers sounds great until the customers start coming in. From the experiences of business owners I know, Grouponers were, simply put, cheap (not condemning cheap people here, as the times demand it for many.) If the groupon is "get $50 for $25," you better damn be sure most customers will spend the $50 and not a penny more. And if it's a restaurant, they'll tip on the $25.
I expect that those customers will not be back; they will move on to the next goupon.They're not looking for a new place to eat; they're looking for a deal.
And for consumers, the deals are already being watered down by the typical (one month free at the gym, or free karate classes for a week) that you see everywhere.

As for the businesses themselves,I wonder how many more of these kind of situations we'll see [annarbor.com] - a restaurant using a Groupon-like company hoping to land quick cash in desperation.

Also, from my conversations with people who own businesses, Groupon's sales approach is very aggressive. They put dollar signs in the business owner's eyes. But eventually, they'll get found out. Right now, people don't want to miss out on this since all the cool kids are doing it.

Of course there are businesses who've had great results with Groupon. I just think it's lunacy to think they're worth $15B.

Dotcom bubble..? (1)

Captain Centropyge (1245886) | more than 3 years ago | (#35278842)

I realize that we need to understand what's going on with the economy, the Internet, etc. But do we seriously need to name every little thing that happens like it's some kind of amazing phenomenon? A dotcom this and a generation that, and everything is called an i-something these days. Just call it what it is! It's an increase in Internet activity, sales, marketing, etc. It's bound to happen with the number of people on this planet that are connected to the 'tubes. Stop trying to put a name on everything!

/Okay... rant over.

What we need now (1)

idontgno (624372) | more than 3 years ago | (#35278862)

is Alan Greenspan rising from the grave* to soberly chide the market about its irrational exuberance.

*Yeah, I know he's not dead. But you can't prove he wouldn't get into a grave for the sole purpose of rising from it, especially if it gives him occasion to do the "irrational exuberance" bit again.

Re:What we need now (1)

0123456 (636235) | more than 3 years ago | (#35279186)

is Alan Greenspan rising from the grave* to soberly chide the market about its irrational exuberance.

Greenspan ran artificially low interest rates for years, then whined when people took all that money and spent it on inflating asset prices. He's probably loving the sequential bubble economy.

No, it hasn't (1)

rsilvergun (571051) | more than 3 years ago | (#35278958)

after the last two bubbles venture capitalists paid congress to enact all sorts of laws protecting them from themselves. You have to show the money is going to the business for one, and there's a ton of rules about how capital can be invested. Plus the world economy (US especially) it too top heavy. All the money's held by the top 1%, and like I said, they've been burned twice and don't have any incentive to get burned again...

One more again (1)

trollertron3000 (1940942) | more than 3 years ago | (#35279110)

As long as this time around I can be the one to cash out I'm fine with it. I saw many millionaire developers driving Ferraris and when my time came it went to the birds. Such is life but a new bubble would be sweet for a lot of us. Is anyone really harmed when a fool parts with his money?

not just Dot com: whole market bubble (1)

mschaffer (97223) | more than 3 years ago | (#35279188)

So many sectors are experiencing a bubble. Not just Dot Com companies. Many economies haven't truly recovered from the last recession and are prone to stall when oil prices get ridiculous.

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