Emergic: Rajesh Jain's Blog

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Internet Bubble?

September 24th, 2005 · No Comments

The Economist writes:

The Skype deal is absolutely a return to the 1999 mentality, says Pip Coburn of Coburn Ventures, a technology-strategy firm. It and many of the other recent and mooted internet deals seem to be based on little more than the belief of management that everything is going to change dramatically in the next few years, in highly unpredictable ways, and so all options need to be covered. Given that mentality, says Mr Coburn, a manager can pretty much justify paying any price.

One difference between today and the late 1990s is that today many of the fancy prices of internet firms are being paid by companies buying them, rather than by investors merely buying their shares. Their motives are understandable: to protect themselves from the potential risks and position themselves for the potential rewards of a maturing internet. What remains to be seen is how much some of these embattled firms will pay in their pursuit of the winning lottery ticket.

Tags: General

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