Nope! Still No Bubble Here, Says Marc Andreessen.
But for the record: Marc Andreessen, who is now perhaps Silicon Valley’s most prominent investor, does not think we’re in a bubble.
The main thrust: This can’t possibly be a bubble, because leading technology firms like Apple are trading at relatively modest multiples. Meanwhile, most of the highly celebrated tech companies that have gone public in the last year, like Demand Media, Groupon and Pandora, have all seen their stock prices get hammered.
“If we’re in a bubble, it’s the weirdest bubble I’ve ever seen, where everybody hates everything,” Andreessen told Wired editor Chris Anderson.
But that’s the public market, Anderson pointed out. What about the private deals, where very young start-ups are frequently being valued at $1 billion or more?
Well, maybe there’s something off there, Andreessen conceded. A “strangeness in the way the market is behaving.” Some of that stems from the way that capital is flowing, because institutional investors are looking for places other than the stock market to park their cash. But that’s only relevant for a “small number” of companies and investors, so that can’t qualify as a bubble, either.
We will listen respectfully to Andreessen, because he has a big brain, and has been intimately involved in a bubble or two himself (that 1996 Time magazine cover featuring him marked the beginning of the Web 1.0 irrational exuberance phase). But for a commonsense, plain-English counterpoint to all of this, see BuzzFeed. (Really!)