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Every boom has its percentage of nay-sayers to predict the inevitable bust, while the practitioners carry on making hay while the sun shines. Now Steve Rubelfrom Edelman PR has just called time with a blog post that says: "Thisis a sad time for the web. It's as almost somber as the time justbefore the last bubble burst in 2000."
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Let's face it, we're skunk drunk and it's because ofmoney. It's almost like we all need to enter Betty Ford Clinic 2.0together. This time, it's not stock market money but private equity,M&A, VCs and to some degree the reckless abandonment of logic bysome advertisers who are perpetuating what is sure to end badly whenthe economy turns. Hubris is back my friends.
In New York Magazine, John Heilemann has also written about Web Bubble 2.0, an idea that's already widespread. At least he quotes Netscape co-founder Marc Andreesson, who points out that this is pretty much business as usual:
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"In the technology industry," blogs Netscape founder Marc Andreessen,who now runs a company called Ning, "lots of start-ups being fundedwith some succeeding and many failing does not equal a bubble. Itequals status quo. The whole structure of how the technology industrygets funded -- by venture capitalists, angel investors, and Wall Street-- is predicated on the baseball model. Out of ten swings at the bat,you get maybe seven strikeouts, two base hits, and, if you are lucky,one home run. The base hits and the home runs pay for all thestrikeouts. If you're going to call a bubble on the basis of lots ofbad start-ups getting funded and failing, then you have to concludethat the industry is in a perpetual bubble, and has been for 40 years.Which may be fun, but isn't very useful."
Back in March, Henry Blodgetwrote: "For what it's worth, I am calling for a real recession, inwhich the economy shrinks and the stock market tanks, regardless ofwhat the Fed does." However, in defence of Heilemann's "tough love", Blodget argues that "Awareness that economies are cyclical is helpful. Yelling about how outrageous and idiotic this is is pointless".
So what does it all mean? (1) We're all in Bubble 2.0 waiting for thebust. (2) Silicon Valley is in a bubble, waiting for the bust. (3)Bubbles are very rare. This is business as usual, please shut up.