Back then people were saying there was a "new economy" driven by the Internet, and that productivity was going to go up like a step function, which justified higher p/e ratios for any company that could claim to be a participant.
We're seeing the saplings of a similar movement now, though. This time, people are talking about online advertising as if the Internet is the second coming of television, even though there are serious doubts about the persistence of revenues going to the Internet's second-largest advertiser (Facebook).
Some other companies: Groupon sells coupons to millions, but small business have mixed reviews of their experience and might be engaging in questionable pricing schemes. Quora is a question-answer site with no revenue model in sight, and they're already valued at eight figures.
If there is any evidence of a bubble, it can be found in how people wave their hands at the future revenue streams of these companies. They're great products, but if their click-through rate sucks how will they make money?
No, it was different. People were saying that the very nature of the entire economy had changed permanently. And that that change came with dramatic, almost overnight increases in the value of everything due to increased communications.
What Damoncali is saying is that the hysteria wasn't focused on particular companies or business models really, it was that people believed we were in the middle of a one of a kind economic paradigm shift rendering valuation concepts like 'profitability' obsolete.
"[There is] an increasing conceptualization of our Gross Domestic Product – the substitution, in effect, of ideas for physical value."
-Alan Greenspan
When you start hearing quotes like that from people in charge, then you know we're really in big trouble.
We're seeing the saplings of a similar movement now, though. This time, people are talking about online advertising as if the Internet is the second coming of television, even though there are serious doubts about the persistence of revenues going to the Internet's second-largest advertiser (Facebook).
Some other companies: Groupon sells coupons to millions, but small business have mixed reviews of their experience and might be engaging in questionable pricing schemes. Quora is a question-answer site with no revenue model in sight, and they're already valued at eight figures.
If there is any evidence of a bubble, it can be found in how people wave their hands at the future revenue streams of these companies. They're great products, but if their click-through rate sucks how will they make money?