Last night, billionaire tech investor and Netscape co-founder Marc Andreessen dismissed financial observers worried that the booming tech market is overheated and may be approaching a dot-com-era-like bust. But in the hours following his talk at the D9 conference in California, even some of the most bullish tech pundits say the Mosaic co-author is getting a little too cocky for his own good.
So why's Andreessen so certain the sky high valuations of Facebook and LinkedIn aren't at all worrisome? He gave two principal reasons. First, we can't be in a tech bubble because everyone thinks we're in a tech bubble. "A key characteristic of a bubble is that no one thinks its a bubble," he said, citing the euphoria in 1999. "If everybody's upset, it's a good sign…I hope there are lots of bubble stories." Second, he said we're not in a bubble because the stock market isn't behaving that way. He noted that the price-to-earnings ratios for some of the most successful tech companies were very reasonable, citing Apple, Microsoft and Cisco's p/e ratios.
On Andreessen's first point about the perception of a bubble, TechCrunch's Michael Arrington, who's on record being very bullish on the tech market, says Andreessen is plainly wrong. "Everyone wasn’t euphoric in 1999," he writes. "There was lots and lots of talk of a bubble. See, for example, this 1999 NY Times story title 'Is Frenzy for Internet Stocks a Bubble Waiting to Burst?' Here’s another article in Forbes. And there are lots, lots more."