Home > DCU Ryan Academy for Entrepreneurship, Propeller Venture Accelerator > Is there a Tech Bubble? Maybe but there are differences this time…

Is there a Tech Bubble? Maybe but there are differences this time…

There has been a number of articles recently about whether there is a Web 2.0 bubble going on…well, maybe but there are differences. All the articles do point out that the 8-months-and-IPOing of the dotcom days are not occurring this time around for the most part.

The thing that is most different for me, and I am old enough to have been around for the first one (in fact I talk about Internet Bubble 1.0 when I teach students entrepreneurship) is that the companies back in 97-2000 didn’t make any significant amounts of revenue (at least not enough to pay for those Super Bowl adverts).

This time around, although it is hard to get good information for the fact they are not public, a lot of these companies are making a lot of revenue. We know now that Facebook is making revenue in the billions, and after Google’s failed attempt to buy Groupon las week, it seems the Chicago startup is making up to $2 billion a year. This is serious cash. And makes Google’s bid for them seem quite low if these numbers are correct.

There are still a number of players where the revenue model is unsure, Twitter would seem the obvious one, but the dynamics are this ‘bubble’ is quite different. Another difference is that many potential Future Stars are actually being bought early due to the mass takeovers that are occurring in the sector, led by Google and Facebook but involving almost all the major technology players.

I call this a ‘Phony War’ in the sense that these companies, due to convergence, are all arming for a conflict where they will take on each other in multiple markets. We will talk about this ‘Phony War’ in more detail in another blog entry.

And the reason? Well as Winston Churchill one said:

“You ask, what is our aim? I can answer in one word. It is victory. Victory at all costs. Victory in spite of all terrors. Victory, however long and hard the road may be, for without victory there is no survival.”

 

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