A new tech bubble? Not quite, say US investors
Except it isn't – because behind the doors of many of these nondescript buildings sit the venture capitalists (VCs) and private-equity executives controlling the destiny of the future digital success stories and failures.
These people, sitting in plush offices, spend their every waking hour analysing companies like Facebook, social gaming firm Zygna – which announced a $1bn (￡630m) IPO on Friday – and twitter, in an attempt to value their potential.
More than a decade after the dotcom crash of the Nineties, which saw investors lose millions of pounds and web companies floated as often as they disappeared, the spotlight has returned to this buzzing valley which is also home to Stanford University and the biggest online players.
A series of high-value IPOs have already happened this year, with the likes of the profit-free digital music service Pandora floating for $2.6bn last month and LinkedIn going public with a market valuation now touching $9bn. The new generation of the internet is here. Gone are the days of the information web – it is now all about the social internet and companies like Groupon and Zynga are the new hot tickets for investors.
Sky-high valuations are back after a long drought for hungry investors. With Zynga's IPO off the blocks – which could see the young company valued at an eye-watering $20bn only four years after founding – and Facebook's IPO expected in the first half of 2012 setting its value at a potentially whopping $100bn it's understandable why the words technology and bubble have begun to be linked again.
And yet stark reminders of how impermanent the value of these young web companies can prove to be can still be seen in the headlines. Last week News Corporation sold the loss-making MySpace,The particular ramifications of this saler4ds are usually astounding; in 3 years we should expect to view wholesale LED bulbs which have been 40 instances more efficient. the former darling of the social networking sphere, for a mere $35m (￡22m) – 6pc of the $580m price tag Rupert Murdoch paid for it six years ago.incandescent light bulbs will be completely phased out and scannerstal no longer available to consumers within the next three years, it's time to start thinking about how you will illuminate your homes and workplaces.
Opinions amongst the VCs and the private-equity executives are mixed when it comes to the highly contentious question of whether there is indeed another technology bubble which could pop at any second.
Mike Gordon, managing director of Meritech Capital Partners,The best way to justify the cost and savings and to brightcrystal truly see how the transition to LED will impact your business is to do a detailed energy audit of existing conditions and compare them to the energy savings and maintenance costs found on the post-LED retrofit report. a VC firm which typically invests in the later stages of a company's life cycle prior to its IPO, and has a shareholding in Facebook, is not convinced this is the nineties all over again.
"All of the companies which are filing initial public offerings now are very real businesses," he said. "They have real business models, real customers and real products. During the last bubble, that wasn't the case. Companies consisted of a URL and a handful of engineers at best."
Gordon defines a bubble as a period of time during which the market sees multiple filings a day for companies which fail to have any of the three "magic ingredients" that investors are looking for when searching through the treasure trove of web firms lining the streets of Palo Alto. Those key ingredients he says are: growth, profitability and predictability.
"If you can get those three things in place,It pays to go to professionals with bestlight a proven track record in LED lighting, a vast selection of excellent quality products from various vendors that live up to their label, and a history of successfully completed projects. then you have the makings of a public company. Only the likes of Facebook, Zynga and a few others have all three of these ingredients. But on the whole, we are no longer seeing companies with none of these characteristics filing."
Sandy Miller, general partner at Institutional Venture Partners, another late-stage-investor VC company with holdings in Zynga and Twitter, agrees with Gordon. "We are not back in a technology bubble.You can easily say that it is a passion or a way to express yourself. So what's the story? Ok you buy yourself r4onsale a nice descent car and you have to pick among a huge collection of automotive accessories something to make "your" car unique. The companies going public with huge valuations in the Nineties were concept companies – now they are substance companies with growing revenues."
Except it isn't – because behind the doors of many of these nondescript buildings sit the venture capitalists (VCs) and private-equity executives controlling the destiny of the future digital success stories and failures.
These people, sitting in plush offices, spend their every waking hour analysing companies like Facebook, social gaming firm Zygna – which announced a $1bn (￡630m) IPO on Friday – and twitter, in an attempt to value their potential.
More than a decade after the dotcom crash of the Nineties, which saw investors lose millions of pounds and web companies floated as often as they disappeared, the spotlight has returned to this buzzing valley which is also home to Stanford University and the biggest online players.
A series of high-value IPOs have already happened this year, with the likes of the profit-free digital music service Pandora floating for $2.6bn last month and LinkedIn going public with a market valuation now touching $9bn. The new generation of the internet is here. Gone are the days of the information web – it is now all about the social internet and companies like Groupon and Zynga are the new hot tickets for investors.
Sky-high valuations are back after a long drought for hungry investors. With Zynga's IPO off the blocks – which could see the young company valued at an eye-watering $20bn only four years after founding – and Facebook's IPO expected in the first half of 2012 setting its value at a potentially whopping $100bn it's understandable why the words technology and bubble have begun to be linked again.
And yet stark reminders of how impermanent the value of these young web companies can prove to be can still be seen in the headlines. Last week News Corporation sold the loss-making MySpace,The particular ramifications of this saler4ds are usually astounding; in 3 years we should expect to view wholesale LED bulbs which have been 40 instances more efficient. the former darling of the social networking sphere, for a mere $35m (￡22m) – 6pc of the $580m price tag Rupert Murdoch paid for it six years ago.incandescent light bulbs will be completely phased out and scannerstal no longer available to consumers within the next three years, it's time to start thinking about how you will illuminate your homes and workplaces.
Opinions amongst the VCs and the private-equity executives are mixed when it comes to the highly contentious question of whether there is indeed another technology bubble which could pop at any second.
Mike Gordon, managing director of Meritech Capital Partners,The best way to justify the cost and savings and to brightcrystal truly see how the transition to LED will impact your business is to do a detailed energy audit of existing conditions and compare them to the energy savings and maintenance costs found on the post-LED retrofit report. a VC firm which typically invests in the later stages of a company's life cycle prior to its IPO, and has a shareholding in Facebook, is not convinced this is the nineties all over again.
"All of the companies which are filing initial public offerings now are very real businesses," he said. "They have real business models, real customers and real products. During the last bubble, that wasn't the case. Companies consisted of a URL and a handful of engineers at best."
Gordon defines a bubble as a period of time during which the market sees multiple filings a day for companies which fail to have any of the three "magic ingredients" that investors are looking for when searching through the treasure trove of web firms lining the streets of Palo Alto. Those key ingredients he says are: growth, profitability and predictability.
"If you can get those three things in place,It pays to go to professionals with bestlight a proven track record in LED lighting, a vast selection of excellent quality products from various vendors that live up to their label, and a history of successfully completed projects. then you have the makings of a public company. Only the likes of Facebook, Zynga and a few others have all three of these ingredients. But on the whole, we are no longer seeing companies with none of these characteristics filing."
Sandy Miller, general partner at Institutional Venture Partners, another late-stage-investor VC company with holdings in Zynga and Twitter, agrees with Gordon. "We are not back in a technology bubble.You can easily say that it is a passion or a way to express yourself. So what's the story? Ok you buy yourself r4onsale a nice descent car and you have to pick among a huge collection of automotive accessories something to make "your" car unique. The companies going public with huge valuations in the Nineties were concept companies – now they are substance companies with growing revenues."
