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I've been online since 1971 and I like to smoothe the way for everyone else. Among other things I co-founded Sympatico, the world's first easy-to-use Internet service (and Canada's largest).

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Saturday, August 26, 2006

Bubble sickness

There’s been a lot of talk about how much YouTube is worth, or Facebook, or digg. Some of it’s by people who analyze such things because it’s their job to do so, but there’s been way more than that. When people start getting excited about all the money that other people could make, that’s when I suspect that not only is there a bubble but it’s going to burst.

I hate this. In late 2000 I lost my job because of the dot-crash. Even though, as a non-believer in the “New Economy”, I’d been careful to work for a company that was private, profitable, debt-free and that had a CEO who also didn’t believe in a New Economy, the company ended up growing to take in the copious amounts of $$$ that dot-coms were begging us to take off their hands. (We did have to work for it.) So when the dot-coms got into trouble, so did we. I got axed in a round of layoffs but soon the whole company went under.

When a bubble bursts, everyone gets spooked and becomes reluctant to engage in even “normal” hiring and investing. It’s horrible and I’m not looking forward to a repeat of 2000/2001. Sure, “it’s different this time”: there are indeed some differences. But once mania/bubble psychology has set in, for whatever reasons, the result is inevitable.

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