I think everyone can agree that it's booming, in much the same way that the housing market was booming. Tech is sexy again, and that's driving investment and throwing money into the ecosystem that otherwise wouldn't be there. That said, the only real test of bubbledom is whether the valuations are sustainable, and whether startups generate profit commensurate with the money being sunk into them.
Google, Apple, and facebook aren't going to continue making $65MM talent acquisitions indefinitely, so at some point the penny will drop. When it does, the question of whether we'll have a popped bubble or an adjustment will be decided on the individual financial condition of the startups in question.
Could the current ecosystem be sustained if Google, Facebook, Apple, and AOL acquisitions were no longer a reality? No. Too many people are investing in features, not companies. Those startups can't survive on their own if there isn't a real possibility of a big exit through acquisition.
Nevertheless, it isn't 1999. Groupon is IPOing with at least some real revenue and exponential growth, and LinkedIn has a solid, if not expansive, userbase. If there is a bubble, it should only affect the startup world, and even then only the companies that can't survive on their own.
If those big companies continue to grow though there is no reason why they won't continue to make the acquisition's. For all the small acquisition's though your also generating new big companies that will be acquiring companies in the future.
A few years back there was no big social gaming company, now you have zynga cashed up and acquiring companies. Same thing could happen in the mobile space, a company that gets really big and then is able to acquire some of the many small new mobile development companies.
I guess I could see Rovio go on an acquisition spree. Still, I think any market predicated upon acquisition rather than growth and profitability is inherently unstable. That instability allows for rapid growth, but it also allows for rapid and catastrophic failure, as we saw in the Banking industry.
Well for acquisition's to happen their still needs to be growth and profitability somewhere, I guess the acquisition's are a way to gaining great efficiency in the market, if each need startup stays independent there is a lot of duplication in activities that support the main business operations.
Google, Apple, and facebook aren't going to continue making $65MM talent acquisitions indefinitely, so at some point the penny will drop. When it does, the question of whether we'll have a popped bubble or an adjustment will be decided on the individual financial condition of the startups in question.
Could the current ecosystem be sustained if Google, Facebook, Apple, and AOL acquisitions were no longer a reality? No. Too many people are investing in features, not companies. Those startups can't survive on their own if there isn't a real possibility of a big exit through acquisition.
Nevertheless, it isn't 1999. Groupon is IPOing with at least some real revenue and exponential growth, and LinkedIn has a solid, if not expansive, userbase. If there is a bubble, it should only affect the startup world, and even then only the companies that can't survive on their own.