• Home
  • Management
  • Startup/Entrepreneur
  • Gamechangers
  • Tech/E-Commerce
  • Career
  • Global Business
  • Women's Business

  • In Case Of Tech Bubble, Do Not Break Glass

    Even if bloated valuations of Facebook and Groupon point to another bubble bound to burst, the Fed shouldn’t head it off but prepare for the fallout.

    Even if bloated valuations of Facebook and Groupon point to another bubble bound to burst, the Fed shouldn’t head it off but prepare for the fallout.

    In Silicon Valley, it’s beginning to feel like déjà vu all over again. Much as in the early-to-mid-90s, a euphoria is surrounding new consumer

    Benjamin Haas

    technologies. Then, it was early Internet software, such as Netscape, and such dot-com darlings as eBay (EBAY) and Yahoo! (YHOO). Now the excitement involves mobile devices such as Apple’s iPhone and iPad and social network services such as Facebook.

    Tech valuations are once again soaring: Apple (AAPL) recently became the second most valuable company in the world, behind ExxonMobil (XOM), with a market cap of $305 billion. Even more striking is the $50 billion valuation that private investors have placed on Facebook. Groupon, a cyber-coupon company, turned down a $6 billion takeover offer from Google (GOOG) last month, and it’s now considering an IPO that could reach $15 billion. “We may be on the cusp of another technology-driven boom,” says Erik Brynjolfsson, director of the MIT Center for Digital Business.

    Or another tech bubble. The last one ended badly—for stockholders, when the tech-heavy Nasdaq index fell from more than 5000 in March 2000 to 1100 in late 2002, and for everyone else in the recession that followed. Now, as investors grow giddy again, odds are the Federal Reserve Board will confront far sooner than expected one of the most difficult and divisive issues in central banking: Should it attempt to deflate an asset price bubble before it grows large enough to threaten the financial system and economy when it pops?

    Read More:

    http://www.businessweek.com/investor/content/jan2011/pi20110121_478821.htm?chan=rss_topStories_ssi_5

    Upstart: Business and Management for 29-40 Year Old Professionals

    Filed Under: Tech/E-Commerce

    Tags:

    About the Author:

    RSSComments (2)

    Leave a Reply | Trackback URL

    1. Check These Out…

      […]check below, are some totally unrelated websites to ours, however, they are most trustworthy sources that we use[…]…

    2. […] This post was mentioned on Twitter by Dan Marchante, upstart nation. upstart nation said: Upstart In Case Of Tech Bubble, Do Not Break Glass: Even if bloated valuations of Facebook and… http://bit.ly/gDMw8F upstartnation.biz […]

    Leave a Reply

    You must be logged in to post a comment.