Tags: Tech | Bubble | Brews | Again | Silicon | Valley

Tech Bubble Brews Again in Silicon Valley

Sunday, 20 Mar 2011 02:54 PM

From sky-high valuations such as the $75 billion one placed on Facebook to a rush to go public to an increase in takeovers, all signs indicate that a bubble is brewing among technology companies.

Facebook's valuation would make the social media king more valuable than Disney, USA Today reports, while several IPOs could take place within a year, including online gaming site Zynga, business networking site LinkedIn, Internet radio station Pandora and online phone-call company Skype.

Talk is spreading that Google and Facebook want to fork over as much as $10 billion for the Twitter blogging service, while coupon site Groupon has spurned a $6 billion buyout offer from Google, according to the newspaper.

"The public's current infatuation with tech has been a long time coming. Tech and Internet stocks turned into bad words after the dot-com bust in 2000. But the get-rich-quick feelings toward tech are back," the newspaper reports.

"It's hard to blame tech CEOs for rushing the IPO window. Investors can't seem to get enough. The stock prices of those tech IPOs, on average, jumped 19% on their first day of trading — the strongest reception for any industry," the newspaper adds, citing Renaissance Capital data.

Nevertheless, talk of a bubble is out there.

Valuing start-up companies so high with unproven revenue is "mathematically insane," says media mogul Barry Diller, according to CNET, a technology news and information service.

"What is interesting is how much sheer invention is going on. The result of it is that valuations, for a period of time, get absurd."

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From sky-high valuations such as the $75 billion one placed on Facebook to a rush to go public to an increase in takeovers, all signs indicate that a bubble is brewing among technology companies. Facebook's valuation would make the social media king more valuable than...
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2011-54-20
Sunday, 20 Mar 2011 02:54 PM
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