 "Photo: Screengrab by Glenn Connelly / Photo Editor")
I magine the feeling of losing 80 percent of your net worth in just a few months. On March 10, 2000, the NASDAQ Composite hit an all time intraday high of 5,133. Soaring technology companies became extinct and vibrant technology hubs became ghost towns virtually overnight. One area that gained notoriety for its rapid deterioration of prominent technology companies was SoMa, the area South of Market in San Francisco. While many people wrote off the dot-com industry as a thing of the past, existing and emerging technology companies began to transform how they operate. This transformation is characterized by the phrase Web 2.0. It gained popularity in September 2005 after the O'Reilly Web 2.0 Emerging Technology Conference. The term represents blogs, wikis, social networking sites, text messaging or any other modern form of technology that distributes information and encourages community and user-generated content. Kim Kimozie, a publicist with Simply Hired, which is a Bay Area Web 2.0 job search engine, is quick to distinguish many differences between what is taking place now with Web 2.0 and what took place seven years ago with the dot-com crash. Foremost is the realization that in the late '90s, startup technology companies needed millions of dollars to grow, and an irrational rush to the public markets in the form of initial public offering's pushed stock market values to unrealistic levels. However, today, the Web infrastructure gives anyone the opportunity to build a successful Internet startup with very little outside capital. What is even more promising is that companies are being driven by consumers whereas the high-flying start-ups of the past were being forced onto consumers. While optimism is high among many people, others point out some striking similarities between what is happening now and what took place 10 years ago. Observers cite the recent $650 million News Corp acquisition of MySpace, the $1.65 billion Google purchase of YouTube and the $2.6 billion shell out by eBay for Skype - all irrational acquisition valuations. They compare these acquisitions to the year 1999 when 117 of 457 IPO's doubled in price on their first day of trading. The difference this time is that the high price tags are set by other public companies and investment bankers whereas previous valuations where driven primarily by retail investors. In his blog, Bubble 2.0 Coming Soon, technology writer John C. Dvorak writes, "You can come up with your own theories about the next collapse … All I can tell you is that it's a sure thing." He mentions the many "YouTube clones" that have emerged, the "neo-social networking" that is taking place and even the hype of the iPhone as "unique initiatives" that will drive the next bubble. While SoMa was nearly abandoned after the dot-com crash, it has experienced a massive resurgence as a vibrant hub hosting dozens of Web 2.0 companies. For example, SoMa has seen its commercial vacancy rate drop from 42 percent in 2002 to 16 percent in 2007. A single building may be occupied by 12 different companies, all of which would classify as Web 2.0 companies. While comparisons can be drawn and predictions can be made, only time will tell how this all plays out. In the meantime, embrace the technologies that are available, stay attentive to the changes that are occurring, and if the opportunity presents itself, take full advantage. Your next big idea may be worth billions within a matter of months. -Dave Seaton is a finance senior.
-This column does not necessarily reflect the opinion of The Daily Aztec.
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