A few days ago one of Google's top employees made the news by publishing in the tabloid Bilanz that there are signs of a new internet bubble. According to Eric Smidt, many companies are overrated in their worth, just as with the last internet bubble.
The principle rests on the idea of consumers that the companies (like Facebook and Zygna) will make huge profits in the future. This will make consumers overrate the company and invest until the bubble finally bursts and the companies go under, because of newer/better programs or because it just simply is not a trend anymore and the hype goes silent.
On the contrary, I think that the course of these companies can take a whole different direction. These companies can beside burst, just grow forever. Growing ever more powerful and influential and ,eventually, take over whole markets. Think of sites like Facebook that actually take over the website world as we know it by integrating websites in their own website. Another possibility is to take over television. Think of Google for example, which is already well on its way to do this (Google TV, Youtube). Especially with the approaching social television (read more about this in my next blog). The reason I think these bubble do not need to burst eventually, is because these companies thrive on the wisdom of the crowds. As long as people can apply input to the programs, and the programs will keep satisfying the market, consumers will stay.
Bursting or overcrowding? Which is the better alternative?
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