The Coming Crash of 2008?
I hope Greg Linden, who is a sharp and experienced guy, was just in a bad mood when he wrote this ominous prediction about what he sees as a bleak dot com future:
We will see a dot-com crash in 2008. It will be more prolonged and deeper than the crash of 2000.
I’d have to say I’m not as worried and although I’d agree there is likely to be an overall decline in the sky high valuations of companies like Google, it will be partly offset by the fact that internet advertising is still in an infancy period. Most internet money comes from ads, and the total internet ad pool is still a tiny fraction of the 500 billion spent per year on all advertising.
What, me worry?
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Question: Is there *really* that much VC floating around right now in startups with business plans that don’t involve profit? Are there really that many common people (as there were in 2000) that have all of their investments tied up foolishly in 2.0 startups?
Personally I don’t know anyone who has sold their mother’s house to buy stock in Web 2-point-anything, unlike 2000 when everyone and their mother was buying into the rush.
Obviously, I don’t think its as bad as he thinks it will be, although we are certainly not in happy-go-lucky financial times. In fact, his tone reminds me of Y2K prospecting fear-mongers who were gambling that if they made a really dark prediction and got lucky with it, then their newly found “expertise” in the market(because they “predicted the crash”) would suddenly be a marketable commodity. If they are wrong, they’ve lost little really (how many of us remember the loudest Y2K prognosticators?), and move on to the next idea. I’m not calling him on this here, but such doomsday predictions are almost always motivated by a personal reason or two.
Bottom line: Bird Flu anyone? Ebola? Two diseases that were supposed to wipe out 40-60 million (conservatively) 3 years ago? And Hmph. Funny — computers have been working for 8 years now, even though according to all of the loudest experts they were all supposed to implode at the stroke of millenial midnight, people were supposed to start secret fistfighting clubs to feel alive, and the shortsighted nature of CS majors in using a binary system was supposed to push Reset on the credit card institutions.
I’m still waiting….
Also a follow-up (from a comment in that original article): Kevin Lee discusses the issue from both perspectives, here: http://www.clickz.com/showPage.html?page=3626757
Metro several good points, though as a startup guy himself ( findory.com ) Greg would seem inclined to be more optimistic rather than pessimistic, which is one reason I found his comments so alarming.
Ah true, except that Findory has failed. Makes you wonder how clear his perspective is given that he’s been in the eye of the funding nightmare of a failed startup…
On the other hand, he’s certainly been in the mix for long enough, and is clearly a very smart guy. So who knows?
Ha Metro – I should have done my homework. You are right of course – Findory is dead!
Long live Web 2.0! ?