Social Networks Named Person of the Year

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Social Networks Named Person Of The Year

By: Mathew Ingram
2006-12-18

Bubble-ology has become a more popular topic than ever now that Time magazine has named You as its annual Person of the Year...

...no, not you specifically, but the collective you - or us; oh never mind.

Link: Time magazine has named

In fact, there's quite a bubblicious debate going on between my friend Paul Kedrosky and Josh Quittner of Business 2.0.

Josh wrote a piece for Time that boils down to the old "it's different this time" argument. Yes, it's kind of bubble-rific out there, but it's okay because it's different. As Paul notes, the most ominous words in the investment business are "it's different this time" - words which are usually a prelude to all the same mistakes being made, but with different names and by different people.

Paul counters that, if anything, this bubble is actually worse than the first one, because "it's cheaper this time to get yourself in just as deep - and this time there is no IPO market to bail you out." And he is right - but then Paul is also the one who told our mesh conference back in May that as a venture capitalist, he is a big fan of bubbles because they speed up the pace of development, and that it "takes a lot of dead bodies to fill a swamp."

In the end, the debate over where we are on the bubble-ometer comes down to a debate over what was wrong with the first bubble. Was it that entrepreneurs got taken advantage of by venture capitalists eager for a big-dollar IPO exit? Or was it that the combination of those two factors wasted billions of dollars of investors' money? If you think that VCs and Wall Street brokers were to blame (as I do), then the lack of IPOs is probably a good thing.

Then the only ones losing money (assuming they are losing) are big companies like Google and eBay. Does the current bubble make it easier for entrepreneurs to get in over their heads? Sure it does. But I don't think they can get as far in, because there isn't as much incentive, and because it's a whole lot cheaper to scale up to acquisition size than it was before.

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Tags: Bubble, Web 2.0

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About the Author:
Mathew Ingram is a technology writer and blogger for the Globe and Mail, a national newspaper based in Toronto, and also writes about the Web and media at www.mathewingram.com/work and www.mathewingram.com/media.


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