The Dow’s at a record high, youthful entrepreneurs are minting dotcom fortunes, and big media types are talking about “monetizing eyeballs”—close those eyeballs for a moment, and it almost seems like 1999. Back then, big media companies threw huge amounts of cash at the hot new things on the Internet: portals and online news sites that had impressive traffic figures but not-so-impressive profit-and-loss statements.
Among the similarities between today’s social networking craze and the earlier dotcom crash and burn, Slate cites:
- Lots of traffic but little profit
- Company value based on number of users
- Large media companies greedily grabbing up sites
What’s different this time around? According to Slate:
- A more mature online advertising market, meaning a willingness to advertise on increasingly popular social networking sites
- Better business models
- Hesitance/skepticism about the success of the next big thing (in this case, social networking)
The article brings up some astute comparisons and makes some good points. What do you all think? Are you plugging your ears in wary anticipation of the next dotcom burst? Or do you think that lessons have been learned and history won’t repeat itself this time around?
