Different but similar bubble this time?
So -- I lived in Bubble Central during the last dotcom boom (NYC, not SF) and very clearly remember some parallels:
- Companies with a shaky (or no) revenue model -- check.
- Gimmicky companies with not much beyond an IPO pitch -- check.
- Metric tons of advertising in every form possible for pets.com, drkoop.com, etc. -- check, but different this time
- Talking heads saying "it's different this time around" -- check.
- Insane tech spend, and spending millions on marketing/parties/etc -- not so much.
Don't get me wrong; I think this social media bubble is going to burn itself out eventually. Investors are going to wake up one day and realize, "hey, there's only a certain percentage of people who will pay to play games on Facebook, or subscribe to "LinkedIn Premium Services" and that'll be that. The difference this time is that there's not the huge tech explosion we saw in the late 90s, simply because everyone's on the Internet already so hardware/comms/infrastructure have already been bought.
LinkedIn does have a revenue model - it's the world's biggest hypertargeted recruiter spam machine. That, and all the freelancing warrior types trying to drum up a living are the paying customers. I like it because it makes it easy for me to keep a work contact list. I don't like the constant friend requests from random sales weasels just because I happen to work for Company X and they're trying to weasel their way in.
A new spin on a famous quote -- "When your local scrap metal dealer is telling you to follow them on Facebook and Twitter, it's time to sell."