Analysts fret over new Internet 'bubble'

Jul 17, 2006

Steadily rising levels of venture capital have some tech analysts worried that a second risky Internet bubble has developed.

The Los Angeles Times reported Sunday that some Silicon Valley observers believe speculative capital is once again chasing technically unsound ideas and that another shakeout like the disaster of 2000 could occur.

"The market has capacity for a certain number of successful winners," Mike Hirshland, a general partner with Polaris Venture Partners, told the newspaper. "Whether it's one, two or, if it's really exciting, three, is debatable ... but eight?"

Hirshland was speaking in general of the scores of blog and social-networking sites that have been absorbing significant amounts of investment capital. The Times said such companies racked up $255 million in the first half of 2006, more than in all of 2005.

Others, however, are not so alarmed and point out that Internet investment is at a much lower rate than in 2000, and there is far greater caution in evaluating initial public offerings in fledgling Internet companies.

Copyright 2006 by United Press International

Explore further: US Congress decriminalizes cellphone unlocking

add to favorites email to friend print save as pdf

Related Stories

China's startups hope for boom after Alibaba IPO

Jun 11, 2014

Nils Pihl has spent 18 months building what he calls cutting-edge software to crunch "really big data sets." But instead of going to Silicon Valley, the 27-year-old Swede and his four colleagues have been ...

Recommended for you

Scalping can raise ticket prices

23 hours ago

Scalping gets a bad rap. For years, artists and concert promoters have stigmatized ticket resale as a practice that unfairly hurts their own sales and forces fans to pay exorbitant prices for tickets to sold-out concerts. ...

Study shows role of media in sharing life events

Jul 24, 2014

To share is human. And the means to share personal news—good and bad—have exploded over the last decade, particularly social media and texting. But until now, all research about what is known as "social sharing," or the ...

User comments : 0