Wednesday, December 29, 2004

Mortgage rates hit 30-year low: "Mortgage rates rose slightly this week, but 30-year fixed-rate mortgage averages this year were the second lowest in 32 years, according to Freddie Mac."—Silicon Valley Business Journal

Friday, December 24, 2004

Venture investors back in aggressive mood: "'The last time our industry was this busy, it turned out to be a really bad idea,' [Austin Ventures General Partner John] Thornton said. 'I don't mean to be Chicken Little, but we've seen this movie before, and it wasn't all that long ago.'"—Austin American-Statesman
IPO for online grocer Ocado: "Founders of Ocado are planning to take the U.K. online supermarket public, according to a newspaper report."—CBS MarketWatch

I remember meeting Louis Borders on the eve of WebVan's launch. He showed us the workstations they would use to track the locations of their delivery trucks. In fact, I think I saw one of those trucks yesterday in Austin, but the WebVan logo had been replaced with that of a local florist. Good luck, Ocado!

Thursday, December 23, 2004

Tech-Book Boom Back?: "Wired editor Chris Anderson has scored a cushy book deal for his article 'The Long Tail'. While he has conceded as much on his Long Tail website, the specifics are in an article in New York magazine:

Wired editor Chris Anderson ... managed to sell The Long Tail to Hyperion for just over $500,000. It's a book-length version of a meditation he wrote for his own magazine about the end of the 'mainstream' in culture. 'Jaws hit the floor over how much they paid,' says one source whose house was outbid. Watch for the Wired trend story: The tech-book boom is back!

"—Paul Kedrosky (UCSD)

Wednesday, December 22, 2004

Dot-com IPOs like Greenfield perked up 2004: "Initial public offerings from Internet companies turned in a strong performance in 2004 and may do so again in 2005."—CBS MarketWatch

Don't the words "dot-com IPO" taste delicious rolling off the tongue? Mmmm.

Tuesday, December 21, 2004

"We'll figure out how to monetize it later": "That's a quote in today's USA Today from Lars Perkins, product manager for Picasa, Google's recently acquired photo software. It's a sentiment that rests deep in Google DNA - make the product first, figure out the business case later. It worked for the original Google service, and it's clearly guiding Print, Orkut, Froogle, and News (though some of those of course are supported by advertising). I don't have the answer to this question, but it's worth raising - how long can this approach to the world stand?"—John Battelle

Monday, December 20, 2004

Day Trading Makes a Comeback: "The success of day traders, who rapidly buy and sell small chunks of shares throughout a market session, excited envy and admiration during the stock market boom of the 1990s. But the collapse of the Internet bubble in 2000 not only sent these rookie investors back to their day jobs, but also gave day trading a bad name."—Reuters via Yahoo! News

The Return of the Daytraders is surely the Third of the Four Horsemen of Bubble 2.0, the first two being the Return of Dumb Money and the Return of Mary Meeker.
Acquisitions 2004: "So far this year, 216 IPOs have raised $43 billion, exceeding the total raised through the 221 IPOs from the previous three years combined, according to Renaissance Capital's By comparison, there were 486 IPOs in 1999 and 406 in 2000. The rise in activity is taking the IPO market back to more 'normal' levels after several lean years."—Adam Rifkin

Sunday, December 19, 2004

U.S. stock rally seen plowing ahead: "U.S. stocks are expected to push ahead next week, adding to an end-of-year rally that some investors say is overdone and a prelude to a market drop early in the new year, strategists said."—CBS MarketWatch

Saturday, December 18, 2004

Home Equity Lines -- Convenient, Risky: "Here's something more scary than
Chucky: A growing number of people are borrowing against their homes to invest in the stock market."—Reuters via Yahoo! News

I knew a guy who borrowed against some of his Bubble 1.0 options to buy more shares in the same company on margin. Need I go on?

Friday, December 17, 2004

21 IPOs debut in busiest week in four years: "A total of 21 initial public offerings have kicked off this week, the most since the week of Aug. 4, 2000, which saw 28 IPOs debut, according to IPO analyst John Fitzgibbon."—MarketPulse
Dan Gillmor on His Move to "Citizen Journalism": "Why is the much respected tech writer leaving what he described as 'greatest gig in the world' for the perilous journey of developing an entrepreneurial idea in citizen-journalism?"—Slashdot

Why? Because that's what media stars do in tech bubbles.

Thursday, December 16, 2004

Stock craziness will end like that: "They will not ring a bell to signal when this craziness is about to end. It will just end—like that. Click of a finger. Like it did in 2000 and like it does in every bubble."—CBS MarketWatch Commentary

Wednesday, December 15, 2004

Newbies Flood Venture Capital (Again): "The WSJ has a piece this morning that is being passed around madly in venture capital circles. Confirming VCs' worst fears, it argues that there is a boomlet under way in venture capital funding, with too many first-time funds being funded by dumb money, and with the so-called 'smart' institutional money -- CalPERS, Stanford, etc. -- cutting their contributions."—Paul Kedrosky (UCSD)
Nasdaq Files For IPO: "The Nasdaq Stock Market resurrected its plans to go public on Tuesday."—

Oh, the circularity!

Monday, December 13, 2004

3Com to Buy TippingPoint for $430 Mln: "3Com said it will pay $47 in cash for each share outstanding in TippingPoint, a 13 percent premium over the stock's Friday closing on the Nasdaq. The $430 million purchase price includes acquisition costs and assumed options, 3Com said."—Yahoo! Finance

Excellent to see Bubble 1.0 poster child Netpliance, which in 2001 took the remaining $53M left over from its IPO, dropped the whole "Internet apppliance" thing, and started a new life as TippingPoint, finally make good.

Wednesday, December 08, 2004

Things heating up in VC-land: "You can tell from the relaxed manner of venture capitalists at recent Christmas bashes -- things are getting better. The Woodside Fund brought out the big wines, Duckborn and Caymus. Doll Capital Management, fresh from its hit with Chinese job site, 51Job, rented out the grand Asian Art Museum in San Francisco, offering an open bar and lavish food. Not to be outdone, Mayfield rented out the Computer History Museum last night, serving equally quality nosh. We bumped into Mayfield partner Kevin Fong who, while sipping at a cocktail, explained how much better things are this year than the past couple."—SiliconBeat

Good to see, but we have a long way to go before we're back to this. Keep it going!

Tuesday, December 07, 2004

2005 Will Be a Very Good Year for IPOs: "Solid offers should be the norm next year."—Forbes
Updated IPO guide released: "Designed for CEOs, CFOs, and corporate directors, the fifth edition of the Wilson Sonsini Goodrich & Rosati IPO Guide was released Monday."—Silicon Valley Business Journal

This was originally written by the wife of a friend of mine in 1998. Download the updated guide and play along at home!

Monday, December 06, 2004 Shares Plunge 13 Percent: " Ltd. shares plunged on Monday after an investment bank that helped lead the company public just two months ago has now urged its clients to sell the stock on concerns future competition might cut into sales."—Yahoo! Finance

Deutsche Bank eats their young.
At the Fair: Glamour, Parties and Oh Yes, Art: "It's been a busy few days for NetJets, the private aviation company: 160 of its luxury planes were to land at Miami International Airport by week's end, more than 10 times the usual number for this time of year."—The New York Times
Have investors learned nothing?: "Is it different this time? No—just as it wasn't during the bubble. When the music stops you still need to find a chair. It's remarkable so many investors still haven't learned that lesson. What's happening, after all, is so 1999. Except that instead of Amazon, we have Overstock."—Herb Greenberg

Note OSTK chart at right. Bubble on!
A Good Year For IPOs: "Only the strongest deals made it to market in 2004."—Forbes

Here's to hoping that 2005 is the Year of the Weak IPO.

Sunday, December 05, 2004

Four Secrets of the New Normal: "The New Normal is a time of unlimited opportunities lurking in places we never bothered to look. Safety nets have been replaced by new possibilities. Corporate paternalism has been replaced by personal responsibility, which exposes us to more risk but also exposes us to more rewards. Technology and globalization have cleared a path for advancement that’s right there under your feet—if you’re willing to take the first step. The rewards have never been greater for those who act. But many are reluctant to act for fear of the unknown."—AlwaysOn

Wait, is this the new normal or the new new normal? I can never tell the difference.

Friday, December 03, 2004

Shaken, Not Stirred: "What is the idle millionaire to do after eating the $100 cheesesteak and the $1,000 omlette? How about washing it down with the $10,000 martini? It's nice to see, in difficult economic times, that conspicuous consumption isn't dead."—Fast Company Now
Is Google Worth $165 a Share?: "For all its impressive technology and verve, Google, as noted earlier, has no such clear competitive advantage. That may help explain why—as was true during the late, great dot-com bubble—many insiders are rushing for the exits. Three top executives, engineering chief Wayne Rossing, general counsel David Drummond, and human resources chief Shona Brown, said in SEC filings at the end of November that they had sold blocks of stock worth millions of dollars. At about the same time founders Brin, Page, and Schmidt announced plans to sell big chunks of their stockholdings over the next 18 months. Brin and Page said they would sell 7.2 million shares each, or roughly 19% of their holdings, and Schmidt said he'd sell some 2.2 million shares, or about 15%."—Fortune

If you have to ask...

Monday, November 29, 2004

E-tailing expectations climb: "But some e-tail stocks may be getting ahead of themselves, as investors price in even stronger growth. Such share appreciation suggests that investors are expecting a stellar holiday shopping season on the Web."—CBS MarketWatch

I'd like to welcome (OSTK) to the Bubble 2.0 Index.

Saturday, November 27, 2004

Irrational Exuberance Again?: "Seeking Alpha, a great stock blog, quotes from a weekly letter from mutual fund manager John Hussman in which he addresses our return to irrational exuberance. It sure feels that way in the market."—Fred Wilson (Flatiron)

Hussman's full article made me reach for the Maalox.

Friday, November 26, 2004

Google Saves The Bubble Fund: "Around the Valley, it's well known that VC funds raised in the late 90s (and hence invested at the height of the bubble) fared poorly. Such was the fate of Kleiner Perkins ninth fund. But that fund did have one big winner - Google. Silicon Beat has the details."—John Battelle

Wednesday, November 24, 2004

Economic `Armageddon' predicted: "In a nutshell, Roach's argument is that America's record trade deficit means the dollar will keep falling. To keep foreigners buying T-bills and prevent a resulting rise in inflation, Federal Reserve Chairman Alan Greenspan will be forced to raise interest rates further and faster than he wants. The result: U.S. consumers, who are in debt up to their eyeballs, will get pounded."—Boston Herald

"Are you gettin' it? Armageddon it!"—Def Leppard
Google rallies after Goldman sets $215 price target: "At Google's current price, Noto argued, the stock trades at a 23 percent discount to the average multiple of eBay, Yahoo, and"—CBS MarketWatch

Go go GOOG!

Tuesday, November 23, 2004

California home prices continue upward: "The median price of an existing home in California in October was 21.4 percent higher than it was a year earlier, according to figures released Tuesday by the California Association of Realtors. Sales were not impeded. CAR says they were up 0.5 percent compared with the same period a year earlier."—Silicon Valley Business Journal

Monday, November 22, 2004

Google sliding as insiders sell $1 bln worth: "Google shares slid below $163 on Monday, the week after 39 million shares became available for sale, including nearly $1 billion of shares sold by venture backers."—CBS MarketWatch

Sunday, November 21, 2004

Google co-founders, CEO to sell up to 16.6 million shares: "Google Inc. co-founders Larry Page and Sergey Brin each plan to sell up to 7.2 million shares of their stock in the online search engine leader during the next 18 months—divestitures that would generate windfalls of more than $1 billion apiece at current market prices."—The Mercury News

Emphasis mine.

Saturday, November 20, 2004

PortalPlayer plans IPO: "Fabless semiconductor company PortalPlayer, Inc., of Santa Clara, has announced an initial public offering of 6.25 million shares of its common stock at $17 per share."—Silicon Valley Business Journal

Gimme an I! Gimme a P! Gimme an O! What's that spell?

Friday, November 19, 2004

Dolby Laboratories Files For IPO: "Dolby Laboratories announced that it has filed with the Securities and Exchange Commission for a proposed initial public offering of its Class A common stock."—DesignTechnica

Bring the IPO's!

Thursday, November 18, 2004

Travelzoo CEO Reports Share Sale : "Traders who've sold short the company's stock have been waiting for Bartel to begin cashing in, hoping it would take some of the air out of the balloon. With about 80% of the company's 2 million available shares currently sold short, there are a lot of traders hoping for the Travelzoo bubble to burst."—

With TZOO shares down 12% on the day, it looks like the shorts don't have to wait any longer.
Google says growth rate may be unsustainable: "Google Inc. said Thursday its revenue growth rate from the second to the third quarter of 2004 may not be sustainable into the fourth quarter of this year and beyond."—CBS MarketWatch

Sobering news to all investors who thought that GOOG's revenue would asymptotically approach the global GDP.
Does Netflix have a handle on its business?: "If ever there was proof that Netflix management doesn't have a handle on it business, which is a nutty business at that, it came in the form of a press release Wednesday that raised and lowered forecasts. This is a company that in recent months raised prices, lowered prices, raised guidance, lowered guidance and now gives us a little of everything—and for the life of me, I can't understand why investors would cheer this news."—CBS MarketWatch

The drumbeat of negative press coverage of NetFlix is growing louder. If they go out of business, do I get to keep the three DVD's I have out?

Wednesday, November 17, 2004

Countrywide Posts 47 Pct Drop in Earnings: "Countrywide told analysts on a call that profits were eroded by a shift in demand among home buyers to adjustable rate loans from fixed rate loans. 'Generally, fixed-rate (loan) products carry higher margins. Our product mix has shifted to more ARMs (adjustable rate mortgages),' Mozilo told analysts. Adjustable rate mortgages—attractive for first-time home buyers because they offer lower monthly payments initially—accounted for 61 percent of all loans Countrywide processed in the third quarter."—Reuters via Yahoo! News

When the oil business went south in the 1980's, Texas banks were swamped by loan defaults. Today, there aren't any Texas banks. A shift to ARM's at a time of rising interest rates seems like a recipe for mortgage defaults. Good luck, CFC.
Netscape Reborn?: "BetaNews reports that Netscape has been revived with Firefox backing. 'Despite media reports and industry pundits over the years relegating Netscape to Internet history books, AOL has restarted the browser's development. The company plans to bring back a refreshed Netscape browser based on Firefox.'"—Slashdot
Analyst says Netflix is 'fatally flawed': "In a report Tuesday, W.R. Hambrecht analyst Bill Lennan reiterated a "sell" rating on Netflix and called the company "fatally flawed.""—CBS MarketWatch

Ouch. Then again, a half-billion-dollar market cap does seem pretty steep for a video rental store—even a big one.

Tuesday, November 16, 2004

Form 10-Q for TRAVELZOO INC: "Our total revenues increased to $9.5 million for the three months ended September 30, 2004 from $4.8 million for the three months ended September 30, 2003. Our total revenues increased to $23.0 million for the nine months ended September 30, 2004 from $12.8 million for the nine months ended September 30, 2003. This represents an increase of 81%. The increase was primarily due to an increase in the number of advertisers."—Yahoo! Finance

Market cap: $1.7B. Annualized revenue run-rate: $38M. Reliving the irrational exuberance of Bubble 1.0: Priceless.

Monday, November 15, 2004

Is the Housing Boom Over?: "The housing market is rapidly losing touch with reality. Fueled by interest rates that have remained near record lows, prices have continued to soar, and the gap between home values and the underlying fundamentals such as personal income and job growth is greater than ever. The most alarming development, though, is the change in psychology. 'The market isn't acting rationally,' says Christopher Thornberg, an economist at UCLA. 'It's now an emotion-driven market where people are buying on the expectation of future appreciation.' Increasingly Americans view houses not primarily as places to live but as foolproof, can't-lose investments. The passionate faith that money poured into real estate will magically multiply is creating a self-fulfilling speculative frenzy that's bound to end badly."—Fortune
Housing Bubble, like every bubble, won't pop on schedule: "Today, for example, the following article by Alexandra Marks appeared in The Christian Science Monitor: Pessimists will have to wait, as housing boom rolls on Remember that great real estate bubble? It appears almost as buoyant as ever, despite the Federal Reserve's decision to raise interest rates for the fourth time since June. The piece echoes a common misunderstanding...."—AlwaysOn Network

AlwaysOn drives a two-bagger this morning. Glad to see Bubble 2.0 has some cheerleaders. Sad to say, they're the same ones from Bubble 1.0.
Asia ignites global IPO boom: "Newly listed stocks often carry high expectations, but nowhere is a worldwide surge of initial public offerings generating more interest than in Asia."—AlwaysOn Network

Sunday, November 14, 2004

5 Stock Time Bombs: "Wherever your investing preferences may take you, I encourage you -- no, beseech you -- to acquaint yourself with the factors generally accepted by the value investment community as sustaining a stock's long-term value."—The Motley Fool

To save you a click, the list includes Google, Travelzoo, Medimmune, and Computer Assciates. It also includes Taser, but with an upside prediction. Travelzoo, trading at 373 times earnings, is the newest addition to the Bubble 2.0 Index.

Saturday, November 13, 2004

The Pros and Cons of a Weak Dollar: "Left unchecked, investors fear a soaring deficit will lead to higher interest rates, lowering the value of U.S. stocks and bonds."—BusinessWeek

Repeat after me, "Sell as you vest, get out of debt. Sell as you vest, get out of debt."

Friday, November 12, 2004

The fed raises interest rates: "American households saved just 1.2% of their disposable income in the second quarter, and just 0.4% of it in the third. An absence of thrift and explosion of credit were, Wicksell said, sure signs that money was too easy—i.e., rates were too low."—The Economist
San Jose leads nation in risky housing values: "Of the country's 50 biggest cities, homeowners in San Jose stand the greatest chance of seeing their homes plunge in value, according to PMI Mortgage Insurance Co."—Silicon Valley Business Journal

Austin scored 133 out of 1,000, which is reassuring given San Jose's score of 509.

Thursday, November 11, 2004

Insiders cashing out of Net stocks: "Relative to the Nasdaq market, it's been a year of great returns for Net stocks, as well as for the insiders who own massive amounts of shares and are selling into these nosebleed levels. 'There is some serious cashing out,' said Jonathan Moreland, director of research at 'The sales do raise an eyebrow.'"—CBS MarketWatch

Let's all close our eyes, take a cleansing breath, and repeat the Bubble 2.0 mantra: "Sell as you vest... Sell as you vest..." NetFlix (NFLX) insiders seem to know to get while the getting's good, earning them a spot as our newest Bubble 2.0 stock. Charts at right.

Monday, November 08, 2004

Second Internet IPO Boom Is More Modest: "Quietly, the IPO market has entered the second coming of the Internet age. It's a far cry from the dot-com boom years that led to the most buoyant period for initial public offerings, only to be followed by the new-issues market's most dramatic collapse. But Internet-related companies are playing an increasingly more important role in IPO issuance this year."—Yahoo! Finance
Traders Raise Bets on Fed Rate Increase in December: "An interest-rate increase at the Fed's Nov. 10 meeting is a foregone conclusion, a Bloomberg News survey of the 22 primary dealers of U.S. government securities showed."—Bloomberg

It's like watching a train wreck in slow motion. Rate hikes affect the massive number of people who have taken out adjustable rate mortgages in the past few years, raising their monthly payments beyond their already maxed-out budgets, leading to widespread defaults, crippling the banking industry, resulting in a global recession. Oh man, is it Monday or what?
Collateral Damage From a US Housing Bust (PDF): "After the U.S. stock market bubble burst in 2000, there were massive corporate bankruptcies. U.S. banks were clever enough to offload a lot of their commercial credit risk to other parties before the bankruptcies occurred. Thus, the U.S. banking system was bloodied by the bursting of the late 1990s stock market, but unbowed. Banks were willing to able to keep lending – if not to corporations, then to households with their homes as collateral. All of which brings me to where I came in. If the U.S. housing market goes bust, the U.S. banking system is likely to fall on very hard times as the value of all that housing collateral drops. "—Northern Trust

The report has some simple graphs that illustrate the magnitude of the danger.

Sunday, November 07, 2004

Internet boom is under way: "'The enthusiasm was well placed, it just got ahead of itself in many respects,' Ms. Meeker said, speaking at the Interactive Local Media 2004 conference in Jersey City, N.J., Friday. 'As we have said for a long time, from a wealth-creation standpoint, we believe we lived through a boomlet, followed by a bust, followed by a boom.'"—The Wall Street Journal

So maybe Bubble 1.0 was really just a "bubblet" and this one is going to be the real bubble. To quote John Kerry, "Would that it were!"

Friday, November 05, 2004

UBS Sees Google Falling: "UBS took a daring stance on Google, initiating the gassed-up shares at reduce on grounds the popular search engine could see slowing growth and margin deterioration in the coming year."—

Is it really daring to suggest that Google is in fact worth but a measly $43.39B? If the very suggestion that the company is $7B overvalued trims $4B off its market cap in one day, I'd say the boys at UBS are barely scratching the surface. Bubble on!

Wednesday, November 03, 2004

Even the Winner May Be a Loser: "Morgan Stanley's Stephen Roach, one of the few Wall Street economists still willing to admit to caring about current-account deficits and consumer debt, is now forecasting a 40% chance of global recession next year as high oil prices interact with the existing vulnerabilities of the world's big economies (such as America's consumer-debt overhang) to bring growth to what he calls 'stall speed.'"—Fortune

Mmmm... global recession.

Tuesday, November 02, 2004

VC funds rake in $5.5b in quarter, prompting alert: "Venture capital funds raised $5.5 billion in fresh capital in the third quarter, 78 percent more than in the prior quarter, prompting a warning by the head of the industry's national trade group that too much money in the system could water down returns and lead to the kind of excesses that sparked the last boom-bust cycle."—The Boston Globe

Monday, November 01, 2004

Here Comes the Crash: "Talk to Jeremy Grantham about the stock market, and you get the impression the sky is about to fall. For years the chairman and chief strategist of money-management firm Grantham Mayo Van Otterloo has been gleefully rattling listeners' nerves with his claim that the excesses of the dot-com bubble still haven't been unwound and that the market is headed for another precipitous drop."—Fortune

Maybe this site should be called Bubble 1.1.
Blog Business Summit Has Launched: "The summit will be the gathering place for hundreds of entrepreneurs, marketing professionals, and current bloggers who want to leverage the latest in Web publishing tools and technologies."—Blog Business Summit

I cried when they cancelled Comdex. Maybe there is hope yet for my T&E budget.
The I.P.O. Succeeded. Who Was Rewarded?: "'The question we're asking,' said one former Epinions employee who asked not to be identified and who plans to be part of the lawsuit, 'is how this company supposedly worth only $30 million was suddenly worth $300 million only 18 months later.'"—The New York Times

Has anyone considered the possibility that the company isn't worth $300 million? Nah...

Sunday, October 31, 2004

Digital Music 2.0: "Welcome to iHollywood Forum. The next big conference December 8-9 2004..."—Ignition Partners

Another twofer: iSomething and Something 2.0! Bubble on.

Saturday, October 30, 2004

"Experts" Awry on Google's IPO Effects: "While correlation isn't causation, I'm inclined to believe that the success of the Google public offering has made it at least a little easier for a host of technology companies to do a late-2004 IPO. The experts strike out again -- and you can bet VCs and investment bankers are working overtime to get product into the launch chute."—Paul Kedrosky (UCSD)

The halo effect begins.
Survival of Fittest and Leanest Becomes Strategy for the Airlines: "'Every time we go through one of these harrowing experiences, the industry has endured, it has survived and it has successfully provided what I consider to be an essential service for the American public and American business.'-Herb Kelleher"—The New York Times

No industry should be able to operate leaner than computer software. Who will be the Southwest Airlines of the tech world after Shakeout 2.0? You can count on one thing: they'll have a hosted model.

Friday, October 29, 2004

Google's rapid rise rewarded the open-minded: "As Google shares flirt with the $200 mark, investors have to wonder whether many of those buying the stock near that lofty level are money managers who once spurned it at half that price. And it's not just day traders..."—AlwaysOn Network

The seduction begins.

Thursday, October 28, 2004

In healthy Indian job market, developers want it all: "As hiring picks up in Bangalore, India, the city's software professionals are again acquiring the spoiled-brat image they had in the late 1990s, when the dot-com boom increased staff requirements at Indian outsourcing companies."—InfoWorld

At least they haven't started giving away BMW Z3's yet. Yet.
Google Investors Revel in Stock's Success: "Google's stock has more than doubled since the company's IPO."—eWEEK

One easy way to spot a bubble: when tech industry trade rags start writing articles about stocks. Bonus points for writing about stocks doubling.

Wednesday, October 27, 2004

Those Dark Clouds over the Street: "Third-quarter earnings would have had to be simply dazzling to add some luster to the market amidst so many reasons for worry. Instead, earnings are turning out to be just ho-hum. For investors, that amounts to one more reason to keep their enthusiasm for stocks in check. "—BusinessWeek

Tuesday, October 26, 2004 IPO Soars 53 Percent: " Ltd. surged in the opening minutes of its debut, recently trading at $27.50, up 53 percent, or $9.50, from its initial public offering price of $18 per share."—Yahoo! Finance

Bubble voyeurs will note the addition of the SHOP chart to this site. First-day close: 28.80. Welcome to the pleasuredome.
Is The Google IPO Rubbing Off?: "Or is going to pop on its own accord? It priced at the top of the range today...and will trade shortly. Lead underwriter: Goldman. Ticker symbol: SHOP ... This does not feel right to me. On the other hand, it feels...familiar."—John Battelle

Do we have another candidate for inclusion in the Bubble 2.0 Index? I think so!
Why This Bull Is Ready to Run: "Joseph Battipaglia of Ryan Beck & Co. sees the S&P 500 near 1300 by next summer, and likes industrials and consumer nondurables best."—BusinessWeek

Monday, October 25, 2004

Google market value surges past $50B, tops Yahoo: "While analysts widely applauded Google's strong sales growth for the third quarter, Janco Partners analyst Martin Pyykkonen commented that the stock is 'priced to perfection.'"—AlwaysOn

Google is now worth more than General Motors, American Airlines, Starbuck's, and Kodak combined. Perfection indeed.
Can The U.S. Stock Market Crash Again?: "The market has already completed a counter-trend rally, and the psychology of investors, advisers and economists is dangerously optimistic. The market is probably doing something more akin to what happened in 1835-1842 or 1929-1932 [versus the 1970s]. According to my analysis, the bear market has already resumed, so the crash potential is significant."—Forbes


Saturday, October 23, 2004

So you think you can make millions: "The nation's seemingly endless property boom has intersected with widespread disillusionment with Wall Street and an unemployment picture that has many people scrambling for new careers. As a result, 'dabbling in real estate' has turned into the modern equivalent of whispering 'plastics' into the ear of graduate Dustin Hoffman."—Chicago Tribune

The speculative real estate bubble is underwritten by large mortgage lenders such as Countrywide Financial, hence the company's inclusion, alongside PlanetOut(.com) and our poster child Google, in the Bubble 2.0 Index.
Do I Hear Google $400?: "Bambi Francisco of CBS Marketwatch has a frothy piece implying that there remains a supply-demand imbalance in Google shares ... As we learned from the Amazon case, it is cheap career-making PR, a low-road move that is a guaranteed and cynical attention-getter. So how can I resist? Google is going to $400."—Paul Kedrosky (UCSD)


Friday, October 22, 2004

Analysts set $145 price target on Google stock: "The Google stock view is eye-popping enough to recall the days of hundred-dollar-plus price targets. Henry Blodget, Merrill Lynch's former star analyst on Internet stocks, hit the high mark for ambitious stock price targets with a famous call in 1998 that would hit $400 in 12 months. Amazon shares hit the target in about a month (since adjusted for splits), but the crash in the Nasdaq a year later made a mockery of the Internet stock analysis industry. "—CBS MarketWatch

Mockery indeed. GOOG: 149.38 170.00 177.62

Thursday, October 21, 2004

TheGlobe Folks Up To Old Hype Tricks... This Time With VoIP: "Last year, we joked about the VoIP bubble, noting that TheGlobe -- one of the more disgraced names of the dot com era for selling nothing but hype and getting the largest one day IPO bump at the time -- had changed their name to VoiceGlo and was hyping themselves up to ridiculous levels."—Techdirt
Homebuilders Are Stretched Thin: "Even as demand falls and inventories rise, they're taking on debt to boost construction and keep up their heady growth."—BusinessWeek

A crash in the housing market would be very ugly. Lock in those rates, kids.

Tuesday, October 19, 2004

The next big thing may be searchable TV: "SAN FRANCISCO - I can tell when the market gets frothy: My e-mail box gets flooded with information about the next-new thing..."—AlwaysOn Network

You know, I can tell when the market gets frothy: I start seeing datelines from San Francisco, city of the eternal acid trip. And I'd like to give a shout-out to my dog, Willie Brown!

Monday, October 18, 2004

Peer-To-Peer Bartering To Replace Money?: "Nicholas Negroponte was a huge supporter of electronic currencies, even as one after another failed. Now, he's back, suggesting that the next version of "electronic currency" will simply make use of peer-to-peer technology to complete multi-party barter exchanges."—Techdirt

Yes, money is obsolete. And the browser is dead. And Segways will change the way we build cities. Can I get a "Dow 36,000!"

Sunday, October 17, 2004

Housing bubble popping in Las Vegas: "The region's second largest home builder, Pulte Homes, has cut its new home prices by 5 percent to 25 percent in recent days, reversing a trend of ballooning home prices and leaving at least one Denver-based real estate investor threatening legal action."—UnderReported
Housing Bubbles Are Not Like Stock Bubbles: "Unlike stock market bubbles, real estate bubbles don't pop. Collapsing stock market bubbles are characterized by a sudden collapse in prices because stock markets are highly liquid. You see huge volumes of transactions at ever lower prices during a stock market collapse. Collapsing housing bubbles, on the other hand, are characterized by illiquidity, a sudden collapse in transactions. Buyers and sellers seem to disappear."—AlwaysOn Network

Being a native Austinite, I've seen this happen before. It's not pretty. At least this time no one will be able to say they weren't warned.

Saturday, October 16, 2004

E-commerce experts: You ain't seen nothing yet: "Opportunity will knock louder than ever for online business in the next 10 years, panelists say."—

Said panelists included both Mary Meeker and Shelby Bonnie, making this one a twofer.

Thursday, October 14, 2004

IPOs!: "I posted a picture of an IPO Prospectus on my blog back in July. It was for our portfolio company PlanetOut. Well it took quite a while, but PlanetOut is a public company this morning. They went effective last night at $9/share and will be trading this morning under the ticker symbol LGBT. I think there are quiet period obligations so I won't say much more about the Company, but its a great company, with great management, and I expect it will be a great stock over time."—Fred Wilson (Flatiron)

All together now: "Content! Commerce! Community! IPO!" Haven't we seen this movie?
Time to contemplate the 100-year bear market again: "So where does that leave us? Marching headlong into a 100-year bear market says Prechter. And while his predictions may still be unacceptable to you and me, the harsh reality is that the facts seem to be rapidly catching up with his theories. And that restores his credibility."—AlwaysOn Network

Once burned, twice shy?

Wednesday, October 13, 2004

Mary Meeker Strikes Again: "Mary's at it again. Last night in Yahoo's conference call she pulled out another stumper, this time a 133-word multi-part query that caused Yahoo CEO Terry Semel to stand back and scratch his head."—Paul Kedrosky (UCSD)

Apparently back from her self-imposed exile, one-time "Queen of the Net" Mary Meeker fueled the expansion and then predicted the bursting of Bubble 1.0 with remarkable accuracy. Will she be the canary in the coalmine for Bubble 2.0?

Tuesday, October 12, 2004

Web 2.0: "My summary: Including the gatecrashers there were probably close to a thousand people in attendance, schmoozing each other up and creating the kind of optimistic, wild enthusiasm that I haven't seen since 1999. Silicon Valley is buzzing again -- and the powerful, the influential, and the entrepreneurial came together to trade ideas, to make connections, and to get energized to take the industry and the world to the next level."—Adam Rifkin

I remember that level. That was a good level.

Monday, October 11, 2004

Podcasting Flashback: "Podcasting <- Shoutcast <- AudioNet/ <- Real/Prognet"—Ross Mayfield (SocialText)

In Bubble 1.0, Yahoo paid $5.7B for Mark Cuban's Who'll be the big winner in Bubble 2.0?

Saturday, October 09, 2004

SegwayFest 2004: "This year’s SegwayFest is going on right now in Coconut Point Florida..."—Engadget

Friday, October 08, 2004

Bubbles Bursting All Around!: "Back in the late '90s, two of the great harbingers of doom were those pesky Perkins brothers, who published The Internet Bubble, telling one and all that our oh-so-pretty house of cards was in the path of a force five hurricane and it was just a matter of weeks or months before real disaster..."—AlwaysOn Network

During Bubble 1.0, Jamis McNiven owned and operated Buck's of Woodside, "where people meet in The Valley to hammer out the Information Age." In Bubble 2.0, he writes, as above, for Always On, "the only media brand to combine traditional news and analysis, participatory journalism (blogging), and a powerful social network (AO Zaibatsu)." Again, I'm not making this stuff up.
Recognizing The Inevitable: "While Om Malik correctly notes that much of [Bubble 2.0] certainly looks and sounds like all the big names of [Bubble 1.0] coming back and saying, "no, wait, this time we got it right,", it looks like there are a few interesting points breaking through. ... The trick is to recognize the unstoppable trends, and figure out how to ride the waves."—Techdirt

"Unstoppable trends" I've seen:
  1. Builders always keep building
  2. Salesmen always want more
  3. VC's always get a 3% management fee plus a 20% carry
Somebody help me ride that wave.

Thursday, October 07, 2004

MSN TV 2 Combines Media Hub and Web Access: "Microsoft's MSN TV (nee WebTV) sheds its stodgy past to be reborn as a multipurpose Internet appliance."—PC Magazine's New Product Update

Can AOL TV 2.0 and Netpliance 2.0 be far behind?

Wednesday, October 06, 2004

Andreessen: IE faces one-two punch: "Netscape co-founder Marc Andreessen says Microsoft faces serious competition from smaller alternative browsers."—

It wouldn't be Bubble 2.0 without marca commenting on Browser Wars 2.0.
Kim Polese returns: "Kim Polese, the woman who coined the term "Java," has found a new job. At the Web 2.0 conference here Thursday, she will unveil a startup called SpikeSource that will provide enterprise support services for open-source software."—InfoWorld

Once admired by Fast Company as "the hottest Web celeb since Netscape poster boy Marc Andreessen," Kim once explained push technologies: "You'll never have to install software again."
Is This a Bubble Yet?: "Q: Did the Google IPO get you guys excited? A: It was remarkable to see the execution. It impacted the valuation and was a good opportunity for investors. Big investors wanted to know more about then auction model than the business model. Then they started asking about the lock-ups rather than the business numbers. The panel thinks the current valuation is reasonable and..."—Jeremy Zawodny (Yahoo)

October 6, 2004, 1:03pm PDT: Bubble 2.0 becomes self-aware.
Pluck raises $8.5M: "Pluck was the brainchild of former Inc. President and CEO Andrew Busey and former AV venture partner Dave Panos."—Austin Business Journal

Let's hope they don't use the money to buy a solid business.
Idealab Rethinks Web Search with Snap: "The incubator, best-known from the dot-com boom, launches a search-engine startup with an eye on re-sorting results and exposing the engine's inner workings."—eWEEK

IdeaLab and Bill Gross and Snap! Oh my!

Tuesday, October 05, 2004

Quote of the Year: "Please God, Just One More Bubble"—Business Week Europe

Look at that, first day and I've already found my site's tagline.
Web 2.0: Lightweight Business Models, Part 2: "Next up in the Lightweight Business Models workshop, a talk by Marc Canter..."—Abe Fettig's Weblog

Note: This one counts as a triple, since it's about a conference called "Web 2.0", the conference costs $2,400 to attend, and the seminar mentioned is being presented by Marc Canter, of DigiScents ("a smell-based platform") fame. (I'm not making this up!)
Back from the grave: Bubble 1.0 fanzines Red Herring and The Industry Standard. Even Tony Perkins is back at it.
A New Age of Innovation?: "While it's not a statistically significant sample, I have had at least three separate conversations with senior technology people lately who, like me, feel cheery about the current technology resurgence. They are all capivated by the many fascinating things going..."—Paul Kedrosky (UCSD)
Business Week Accidentally Raises Overhype Alert Level to Orange: "I've said it before and I'll say it again. When mainstream magazines start interviewing people who call themsleves "futurists", get out your waders, becuse it's going to get deep."—Moonwatcher
The Return of the Venture Capitalists: "The hung-over partygoer finally puts some clothes on and makes it to Kerbey Lane for brunch."—Moonwatcher
Paul Graham gets wistful for Bubble 1.0 in "What the Bubble Got Right"
CNET (c|net?) founder Halsey Minor resurfaces, this time aiming to increase his wealth a few more orders of magnitude by investing in companies offering software on demand, known in Bubble 1.0 as "application service providers" (and in the original Go-Go Years of the 1960's as "processing services").

Bubble 2.0?

The signs are all around us. First a mainstream business publication quotes Howard Rheingold. Then Esther Dyson starts making investments. Before you know it, there's a new Vespa store in downtown Austin. Is it Internet 2.0? Maybe. Is it Bubble 2.0? Only time will tell. But along the way, we'll be following the signs, and invite you to follow along.

This site is maintained by Charlie Wood, a Bubble 1.0 survivor and avid blogger. You can reach him directly at His other blogs include Moonwatcher, Globelogger, and Tablog PC.

The site's tagline, "Please God, just one more bubble!", was seen on a bumper sticker in Silicon Valley during the nuclear winter of 2000-2004.