Ten Years After the Dot Com Bust, Tech Is Booming Again
As with many milestones, industry observers are taking a moment to reflect on what went wrong and -- ten years later -- where we go from here. Roger Kay, president of Endpoint Technologies, says the fundamental problem with the Internet bubble was that tech executives miscalculated how quickly the general public would embrace emerging technologies.
"Smart people see things right away and think that they'll happen overnight," Kay says. "But it turns out that it takes the public 20 years to catch up, and in the interim investors can lose a lot of money."
Ten Years Later, Another Boom
Ten years after the collapse of the tech bubble, the public has come a long way toward adopting new technologies, as broadband Internet grows more ubiquitous and smartphone sales explode.
Today, tech is booming once again. Since the financial meltdown-driven March 2009 market lows, Apple (AAPL) stock has soared 154%, eBay (EBAY) has risen 130%, Amazon.com (AMZN) has climbed 99%, Hewlett Packard (HPQ) has increased 91%, Google (GOOG) is up 87%, and Intel (INTC) has risen 52%.
New services like Facebook and Twitter have created massive communities of people who can communicate with each other -- and the wider world -- in the blink of an eye. Revolutionary devices like Apple's iPhone have taken the power of computing off your desktop and put it in the palm of your hand. And a new generation of location-based services like Foursquare is poised to make major inroads with the public.
The Future: Like Now, Only Better
Looking ahead, Kay sees a future ten years from now that "doesn't look a lot different conceptually than it does today."
"If you believe that beautiful devices of all sizes are what people will want in ten years, then Apple will certainly have a seat at the table," Kay says. "Cloud services are clearly going to be a big deal, and those are the big guys like Amazon, Microsoft and Google. E-commerce will be done everywhere. You can use your phone, your PC or your tablet, and all of your stuff will be on all of your devices and also replicated in the cloud so it will always be backed up."
Another area ripe for growth is data-mining, and it should come as no surprise that Google will be leading the charge.
"By sifting through incredible amounts of data companies like Google will be able to target advertising like never before," Kay says. "Companies will know which married men aged 45 are interested in a new car. They'll see the patterns, run the data, and create a narrative that explains it. Then, they'll monetize that story."
But not everyone is buying the hype that we're seeing a new tech renaissance. Paul Kedrosky, the noted financial expert and blogger, is concerned that the market is beginning to show similarities to the previous Internet bubble.
"Stocks don't go up just because you really want them to," Kedrosky says. "During the Internet bubble, we got over enthusiastic and expected change to happen too fast, and it just didn't. And we're doing it again."
Citing Cisco's (CSCO) recent unveiling of a new high-speed router -- which the company said would "forever change the Internet" -- Kedrosky says tech companies are trying to convince the market that they're poised to revolutionize the world yet again. "It's kind of like the story about how second marriages are the triumph of hope over experience," he said. "We already know this story."
Ten years after a devastating market crash that destroyed billions in wealth and cost hundreds of thousands of jobs, tech seems to be booming again. Let's just hope that we've all learned enough not to make the same mistakes again.