Yes, I know. There's a Social Media bubble. I hear it discussed in the news lately, and now that Facebook is involved with Goldman Sachs and IPO talk is a fly-ing, we're going to hear even more hand-wringing discussions of The New Bubble. Then there will be debate about A Social Media Bubble. Then we will see endless articles on it. Then I will go buy myself some sake and try to forget the articles clogging my newsfeeds.
OK, let me clear it up for our pundit friends who need to fuel a 24-hour news bubble.
Of course there's a Social Media bubble. We're seeing ridiculous amounts of money thrown around for companies that may or may not be profitable – that is part of a Bubble. We're also seeing crazy amounts of cash invested in companies whose profitability may not endure – that is part of a Bubble. Potential valuations seem questionable and inflated for many companies – that is part of a Bubble.
Come on you don't need to discuss it, it's obvious and in-your face.
I mean, seriously, how much is Facebook or Twitter really worth? How do you measure it? Is Groupon's popularity and potential profitability going to last? Can we trust any financial estimation after so many meltdowns – we probably have to worry about a Bubble just because people would love to see one to try and make some money.
OK fine so we have a Bubble. Now the next thing . . .
. . . stop acting like this is some late-90's-all-over-again mess.
Look, reporters and pundits, I know you like your narratives, and I know the last Bubble where people poured money into flushmoneydownthetoilet.com is a great example of a Bubble. But I think the doomsaying getting thrown around ridiculous and fueled by memories of the last time investors went insane and invested in things like lemursonline.net and touchmynose.com.
We are not in the 90's.
Yes, some social media is overvalued. But this is not the late 90's with all its ridiculous projects and insane speculation in every niche. This is an age of leander and meaner companies, of hard lessons learned from the meltdown, of a different group of entrepreneurs. The Bubble is being called out in a limited area of economic activity. The very fact that people are calling out a social media bubble is a sign that we can avoid the economic insanity of the past.
So please, call out the Bubble, but no Doomsaying. I've been listening to the usual cycles of who's-going-to-die for years. No panic, no return to the 90's BS. Let's just report on what's going on and speculate appropriately.
I'd like to see what lessons we can learn from this Bubble unencumbered by as much B.S. as possible about the 90's.
Steven Savage