Dave Kearns

Poor John Dvorak. He’s only been writing about, and accurately foretelling, the story of computing for over 20 years. But he recently had the temerity to suggest that another internet bubble is about to burst. He cites the proliferation of so-called “social networking” sites, video-sharing sites and alludes to the eventual crash of Google’s ad-supported search philosophy. He is, of course, instantly attacked – especially by those too young to have suffered through “bubble 1.0″ (less than 10 years ago). One of the more thoughtful disputations was mounted by my friend Eric Norlin (“Because I’m a Sucker“) but even he overlooks the primary reason for the upcoming burst while alluding to it as a benefit: “The last ‘bubble’ occurred around public equity markets, as they provided the liquidity and transparency needed to really drive a mass bubble.” This next bubble will be driven in the same way, but via the Merger & Acquisition market. Google, for example, whose stock is already so vastly overinflated that it alone could fuel a bubble burst, continues to buy up new ventures whose sole business plan is “let’s do something catchy then sell out to Google, or Yahoo, or whoever bids highest.” None of them, from MySpace to Flickr have the remotest concept of a path to profitability – but that doesn’t stop the portal players from throwing money down their drains.
In just a couple of years Dvorak will have been proven prescient once again.

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