Current Tech Bubble is no 1999′s
At the start of the new millennium, there was a great deal of promise and hope on the horizon. The Internet had made everyone rich. However, the riches left as soon as they came. Businesses with no real value lost all of their accrued value overnight as people seemed to find out all at once that there was nothing behind the collective curtain.
Observers of today’s online marketplace may believe that there is the potential for the same kind of bubble. Social media sites such as FB, Twitter and LinkedIn have been given “value� of billions of dollars. Tumblr sold for US $1 billion and change to Yahoo and made its young proprietor an instant superstar. However, there is one major difference between the stocks and companies of today and the tech bubble stocks of 1999 - people actually know how to make these social media sites profitable.
- The Difference Between 1999 and Today
In 1999, there were two things that were not in place: the ability to centralize information grabs and a way to monetize that information by feeding it back to potential customers through advertisements. The world as a whole still did commerce through TV, radio and word of mouth. All of the information that people were sharing online had no connection to their lives.
Today, virtually everyone with expendable income has a smartphone or a tablet; moreover, these people do day to day commerce on these devices all the time. They also receive other content such as information and news on these devices. This gives advertisers the ability to put ads in front of these people much more readily.
- Tumblr, Yahoo and Today’s Social Media
The reason that Tumblr can be bought by Yahoo today is because of the advertising network that Yahoo has built. The information that is put on Tumblr today can be collected and used for years to sell products back to the very same people who are putting up the information. Both Tumblr and Yahoo are also connected to other social media profiles of their userbase such as Facebook, Pinterest and many other sites that offer a much more complete picture of the people who are using the services. Just as the the entire graphical interface of the Internet in 1999, the picture of who was actually using the online world was grainy. Today, that picture is crystal clear to the sellers.
Jonah Engler loves spending his free time researching about finance and stockbroking.