For those of us who weathered the first economic implosion of the internet and ad spending in 2001, there is that lurking fear in the back of our heads: Are we doing it again? Has the new generation of internet evangelists not learned from our mistakes? Does the world really need yet another online calendar company that just got funded by venture capitalists?
And then I remember, it was never the internet that imploded, it was the stock bubble of enthusiastic investors who were unable to value the new companies because there was no model to do so. Ad spending vaporized because many of the decision makers retreated to safe marketing practices they understood. It was a double internet whammy.
But during that entire ride, usage of the internet increased -- month over month -- and people kept coming.
Chart compiled from eMarketer data, 034899, 080261
A colleague of mine reminded me of a great book I hadn't read since college titled "Extraordinary Popular Delusions & the Madness of Crowds," first published in 1841. Yes, that’s right, 1841. I decided to re-read it prior to writing this piece and was reminded that when it comes to the effect of social behavior on the intelligence of individuals, one plus one is often less than two, and sometimes considerably less than zero.
Groupthink just makes the internet more vulnerable to social whims. That is the nature of the virtual world, where the lack of many manufacturing costs related to starting a business -- combined with the decreasing costs of the technology needed -- allow for a higher degree of transience.
Here are some of the signs that this new bubble is not the Tulipmania of 1624 (when tulip bulbs traded at higher prices than gold), and other signs that indicate that it is.
Author notes: Sean X Cummings is director of marketing for Ask.com. Read full bio.