Tech Bubble of the 2000s

A few days ago, I read “As Technology Deal Booms, the Talk Turns to Bubbles” by Heidi N. Moore. Within the article, she reported that most within the tech industry consider the current era a bubble. This bubble has been crafted by the rise in social media integration, ad placement on such social media, and smart phone networks. Technology deals have peaked through the roof, and venture capitalists are seeking out companies that take advantage of this bubble. The article goes on to report that many including VC John Doerr consider this bubble “a third wave of innovation” whereby “ the previous two waves were the PC revolution…and the internet boom”.

Today, I read “A Business Creator Sees Big Returns from Social Media” by Darren Dahl. The article profiled Eric Lefkofsky, an entrepreneur with a worth of an estimated $750 million. He has made the bulk of his wealth from starting up businesses that take advantage of advanced accessible technology, such as Groupon. The most important point of the article is Lefkofsky just started Lightbank, an investment firm which “invests only in early stage technology companies that are built around social media”.  The rest of the article is a short interview whereby Lefkofsky states the belief that all businesses should be using social media and using it well.

Social media has crafted the flow of money. I agree with others in the tech industry that we are living in another bubble. Almost all new companies spawn their internet alter egos and clone themselves using social media. This has led to advertising doing the same thing. And now, investors are seeking social media focused companies. All the money is flowing down this river.

Its not too much to expect businesses to advance using social media. The other night, inspired by my boyfriend playing “Call of Duty: Black Ops”, I explored the game’s twitter page only to find the page to be subpar. I was disappointed. "Call of Duty: Black Ops" is an international multiplayer communal game and should be using social media frequently to advance that community. This is my point. Social Media should be used where it makes sense.

While Lightbank is a great idea capitalizing on the moment, it worries me that technology might be in a moment. A moment whereby any and everyone is creating apps to make money from ads and everyone is connecting their businesses to social media to keep up with theJones, Inc. Hopefully, (not to be sarcastic) this bubble will not burst.  Let’s not forget, the dot-com bubble and burst of the 90s. And if it does burst, most of the businesses that will survive are the ones who used social media as an aspect of their business but not as their entire business.

Note: clearly, a few social media focused businesses would survive a social media bubble burst, which is why I stated most and not all businesses.