Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Eliminate costly downtime!
Find out how with Free White Paper
& enter to win a Samsung Galaxy Note

www.apc.com
Cloud Computing
Register for a certification exam.
Average Rating:
Rate this article:  
Is Silicon Valley Heading Toward Another Tech Bubble?
Is Silicon Valley Heading Toward Another Tech Bubble?

By Chris OBrien
May 5, 2014 9:33AM

    Bookmark and Share
Venture capitalists and entrepreneurs insist that the Silicon Valley tech economy is not in bubble territory. Yes, they misjudged just how fast the Internet would change the world a decade ago and let things get a little bit out of hand. But this time, they say, the revolution of mobile and cloud services justifies big, bold bets.
 



Venture capital rising to levels not seen since 2001. Companies with no profits going public. Billions of dollars being paid for start-ups.

These and other signs that the tech boom may be taking an irrational turn are leading some notable investors to utter the dreaded word "bubble," waking up the ghosts of an era many in Silicon Valley would prefer to keep buried.

Has Silicon Valley once again lost its collective mind?

Hedge fund manager David Einhorn thinks so. "There is a clear consensus that we are witnessing our second tech bubble in 15 years," he warned in a note to his clients last week. "What is uncertain is how much further the bubble can expand, and what might pop it."

Venture capitalists and entrepreneurs insist that the Silicon Valley tech economy is not in bubble territory. Yes, they misjudged just how fast the Internet would change the world a decade ago and let things get a little bit out of hand.

But this time, they say, the revolution of mobile and cloud services justifies big, bold bets. And most of the companies going public are profitable, with real businesses that are transforming the way we live.

To some tech insiders, the region's economy is in a "Goldilocks" moment. Not too hot. Not too cold. Enough of a boom to be just right.

Greg Becker, president and chief executive of Silicon Valley Bank, isn't so sure. "There's absolutely a frothiness out there in certain sectors," he said. "With some of these companies, we've never seen growth rates like this before. How much is that growth worth? What's the value? That's what people are trying to get their arms around."

During the dot-com bubble of 1999 and 2000, Silicon Valley believed the Internet was causing such a rapid revolution that there was ample justification for pumping billions of dollars into half-baked start-ups that went public by the hundreds.

Tech executives insisted there was no bubble -- that it was a "new economy" -- right up to the moment when their hubris drove the region into an economic abyss.

The tech-heavy Nasdaq composite index fell from 5,046.86 to 1,114.11. Silicon Valley saw 200,000 jobs evaporate overnight. But the bubble grew so large that its bursting also dragged the national economy into recession. Silicon Valley was chastened and saw its credibility shredded.

It's taken almost a decade for the region to regain the trust it squandered, particularly with Wall Street and investors. And the valley is eager to show that it has learned all the right lessons. (continued...)

1  |  2  |  3  |  Next Page >

 


© 2014 Los Angeles Times (CA) under contract with NewsEdge. All rights reserved.
 

Tell Us What You Think
Comment:

Name:



APC has an established a reputation for solid products that virtually pay for themselves upon installation. Who has time to spend worrying about system downtime? APC makes it easy for you to focus on business growth instead of business downtime with reliable data center systems and IT solutions. Learn more here.


 Cloud Computing
1.   Cloud Wars: AWS vs. Microsoft, IBM
2.   Yammer Moved to Office 365
3.   IBM, California Partner in the Cloud
4.   Dropbox for Business Boosts Security
5.   Avaya Pressing Hard on Cloud-Based UC


advertisement
Amazon Intros Zocalo Storage Service
Online storage and sharing for business.
Average Rating:
Avaya Pressing Hard on Cloud-Based UC
Provides easier, faster provisioning.
Average Rating:
Cisco Woos More Devs with DevNet
To create new network-aware apps.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Canadian Government Charges China With Cyberattack
The government of Canada is not happy with China. Canadian officials have accused "a highly sophisticated Chinese state-sponsored actor" of launching a cyberattack on its National Research Council.
 
Researchers Working To Fix Tor Security Exploit
Developers for the Tor privacy browser are scrambling to fix a bug revealed Monday that researchers say could allow hackers, or government surveillance agencies, to track users online.
 
Wall Street Journal Hacked Again
Hacked again. That’s the story at the Wall Street Journal this week as the newspaper reports that the computer systems housing some of its news graphics were breached. Customers not affected -- yet.
 

Enterprise Hardware Spotlight
Apple Updates MacBook Pros, Cuts Prices Up to $100
The popular MacBook Pro laptop line just got an update and a price cut of as much as $100. The MacBook Pro with Retina display now includes faster processors and double the memory.
 
Watson Gets His First Customer Service Gig
Since appearing on Jeopardy, IBM's Watson supercomputer has been making a living using his super-intelligent knowledge base for business verticals. Now, Watson's been hired for his first customer service job.
 
Tablet Giants Apple and Samsung Feel the Heat
When a company saturates its home market with a once-hot product, expect it to pump up efforts elsewhere. Apple, for its part, is now pushing iPads to big corporations and the enterprise market.
 

Mobile Technology Spotlight
Android 'Fake ID' Puts Millions of Users at Risk
Having this fake ID is nothing to brag about, even if you are a minor. The “Fake ID” Android flaw drops malware into smartphone apps. It can steal credit card data and even take over your device.
 
FTC Wants Fix for 'Perfect Scam' of Mobile Cramming
The U.S. Federal Trade Commission has issued new guidelines to curb “mobile cramming,” a troublesome practice that adds unauthorized third-party charges to mobile phone bills.
 
Facebook: You Will Use Messenger, and You Will Like It
Starting this week, Facebook users with Android and iOS phones will be forced to use the separate Messenger app to send Facebook messages. Pending messages will still be visible in the main app.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.