Boom, Echo, What?

To boom or not to boom, that is the question in technology where the exhuberance around Web 2.anything is getting some pushback, such as a USA Today article that notes the absence of a Wall Street froth over Internet stocks:

“Outside of Google and a few other choice names, it’s hard to find an Internet company that gets investors’ juices flowing — let alone gets them to pull out their wallets.”

But in the next breath reporter Matt Krantz calls this investor wariness “a healthy change” compared to the last bubble frenzy, and in so doing moves a step closer to the optimistic view that Wired editor Chris Anderson puts across in a piece entitled “The New Boom.”

Anderson notes that a lot of investment from the last boom, such as fiber optic capacity and office space, is already in place and available on the cheap. Entrepreneurs and investors are also boostrapping their operations, lowering burn rates and delivering revenues earlier. As Anderson writes:

” … you can start a company today for a tiny fraction of what people spent five years ago. Joe Kraus, cofounder of the bubble-era search engine Excite, estimates that his new company, JotSpot, will make it to first revenues with a total investment of about $100,000 – less than 5 percent of what Excite burned through a decade earlier.”

In a way Wired hedges its bets on the boom call with a companion piece called “In Praise of Bubbles” that says investment manias are a way of economic life. That piece cites the telegraph boom of pre-Civil War vintage as a bit of over-investment that left in place the wires that correspondents used to file dispatches during the war. That point seemed apropos given the recent demise of the telegram.