Internet Recreate Irrational Prosperity &Nbsp; Watch Out For New Bubbles.

Just after the Internet bubble burst in 2000, there were some begging stickers in the Silicon Valley area: "God, please have another bubble."

This wish is now realized.

Compared with other parts of the United States, Silicon Valley is a thriving city.

Business executives are in short supply, office rents are soaring, and the salaries of talent in data technology and other popular fields even reach the level of Hollywood.

But considering the current valuation of Internet Co, this is not surprising.

Facebook and Twitter are not listed yet, but the market value in the two tier market is as high as 76 billion dollars (more than Boeing or Ford) and 7 billion 700 million US dollars.

This week, LinkedIn, a professional social networking site, said it would take IPO valued at $3 billion 300 million (initial public offering).

The next day, Microsoft announced that it was willing to sell $8 billion 500 million for Internet phone calls and video services, Skype, which is 10 times the sales volume of the company last year, and the multiple of its operating profit is 400 times higher than that of the company.

Moreover, these are the big companies that users all over the world.

The valuation of some start-ups in the private market is even more exaggerated: a picture sharing social network named Color has recently been valued at $100 million, but its service has not yet been tested.

In addition, all enterprises concerned with China have received a high premium.

The stock of China's Internet giant, known as "China's Facebook" and other listed companies in the US, has been touted.

Will history really repeat itself? Those who hold a negative view point out that the technology industry has undergone tremendous changes since the late 90s.

At that time, there were very few people on the Internet. At that time, the total number of Internet users reached 2 billion, and many came from China.

Those who think that "the situation has changed" also pointed out that the bubble of 90s of last century occurred after a listing of Internet Co, and the share price was pushed to the level of crazily by us local investors.

And today's

In some ways, optimists are right.

This time it is quite different, though it is not because the cycle of bubbles and ruptures has miraculously disappeared.

This time it is different because the technology bubble is mainly formed in the private market outside the public view, and has the international tentacles lacking in the last bubble.

Part of the power of the bubble comes from wealthy angel investors, some of whom have accumulated personal wealth through the IPO trend of the late 90s.

Their financial resources gradually increased, and they began to compete for the equity of Internet start-ups.

In some cases, in order to win pactions, angel investors may even avoid the steps of due diligence.

While investing in Facebook and other larger and more mature Internet Co, the traditional Vc firm now wants to compete with Private Equity Investment Firm and bank led funds. They all hope to pursue profits in a depressed investment environment.

Compared with the waitress who blew up the bubble ten years ago, the private equity investors wearing GUCCI shoes seemed to be more sophisticated, but many of the novice were not clear about the technology industry. Gucci

The breadth of the bubble is also larger than the last one.

It can be said that this prosperity began with Russian investors.

Skype was born in Estonia.

Rovio, a developer of the popular smartphone game angry birds, has recently raised $42 million in Finland.

Besides, there is China.

It is believed that everyone and Youku, known as "China's YouTube", will provide investors with a profit opportunity, not only to enjoy China's super high-speed growth opportunities, but also to grasp the wide influence of the Internet on business and society.

China's Internet start-ups usually get a valuation of 15 million to 20 million dollars in early financing, much higher than their counterparts in the US.

These differences are significant.

First of all, when the bubble formed in the private market has entered the open market, the scale will be very huge.

Facebook may become the next Google, and LinkedIn has a very strong revenue generating plan.

But their followers are not strong enough to worship Facebook and LinkedIn, and share prices may have been pushed to a dangerous level by angel investors.

The bubble of China's Internet industry may also lead to unrealistic valuations in other regions.

And ultimately, the collapse of the Internet bubble may also be China.

Few investors who are buying Chinese stocks will consider the policy risks faced by these companies.

Like financial scandals, once a well-known Internet Co is sanctioned, it will make investors uneasy and trigger widespread selling.

If you are lucky, the latest Internet bubble will be less damaging than the last one.

In the 90s of last century, high investment sentiment triggered by the Internet led to surging shares in telecom companies, which created the infrastructure for the Internet.

Telecom investors also suffered heavy losses when Internet Co's share price plummeted.

So far, there is no indication that this spillover effect will also occur.

But the globalization of the Internet industry means that more people will not be tempted to participate in the current Internet stock market, causing the final bubble burst to produce more pain.

When will the bubble burst? This magazine issued a warning long before the dotcom bubble and the US housing bubble burst.

Irrational prosperity usually does not soon yield to rational doubt.

Therefore, some people who bet on start-ups will also be rewarded.

But investors should pay more attention to the timing of exit: they can not always rely on others' overweight.

They might want to put another sticker on the car: "thank God.

Now please give me the wisdom to sell in time.