This Tech Bubble Is Different

I sympathize with this view, but the very example given contradicts the thesis that this bubble will leave no technology in its wake.<p>Hadoop was developed at Yahoo, an advertising supported company. Some of the most interesting contributions (HDFS sync, RaidNode, AvatarNode) have come from Facebook, an ad supported company. Hadoop's architecture itself is inspired by the MapReduce and GFS papers from Google, another ad supported company. This shows that the premise is false: there is indeed technology transfer from the "hot businesses" to other companies and academia. Hadoop is the prominent example, but not the only one: many contributions to the Linux kernel come from Google, both Google and Facebook have also contributed extensively to MySQL.<p>The ad ranking and recommendation algorithms themselves are also by no means trivial, much of the work that goes on in that field (machine learning, information retrieval, natural language processing, large scale graph processing) is applicable elsewhere. The "math wiz" college graduates working on these fields, are going to be able to apply the skills they build elsewhere. Not to mention, the stock options, even if we assume modest outcomes, could pay for many a Ph.D. for engineers who wouldn't otherwise afford to take the time off from industry.<p>There are also products like GroupOn that don't seem to be technology driven at all, but that can change rather radically (e.g., Amazon's move from a technology consumer, to a producer of their own technology, to a company selling technology to others).<p>In other words, one doesn't have to sell technology to businesses in order to build technology that benefits others. There's nothing wrong with selling technology to businesses (and if I were to start my own company, I'd start one that does that, because I understand e.g., distributed databases and market for them better than I understand, e.g., machine learning and consumer marketing), but there's nothing wrong with providing an ad supported service to consumers, as long as interesting and universally applicable technology gets built in the process.

"Hammerbacher looked around Silicon Valley at companies like his own, Google (GOOG), and Twitter, and saw his peers wasting their talents. "The best minds of my generation are thinking about how to make people click ads," he says. 'That sucks.'"<p>I loved this quote, I also had a similar experience. In past I had an internship in a similar role and pursued few projects on mining communities in large social networks. However luckily I got an amazing opportunity of working at med school/hospital affiliated with my university. I now apply similar algorithms, but now I help radiologists and physicians.<p>Lets hope that in future the methods that are developed for optimizing ad clicks could probably be useful in some other field. E.g. how IBM is now planning to use Watson in healthcare. My guess is that a lot of algorithm used in developing Watson, were developed for ranking Ads. Closer home, I use a 55 node Hadoop cluster for processing 19 Million annotated PubMed abstracts.

I don't agree with this article.<p>Just because a lot of time is spent working on "non-interesting" problems, technologically speaking, like Facebook and Zynga, doesn't mean that there aren't plenty of startups who <i>are</i> working in more technologically-impressive fields (<i>). The entire article is completely anecdotal.<p>To make things worse, it explains how Groupon's only tech innovation is "cute email". But I don't understand why people call Groupon a (technology) startup. It's just a company. A fast growing one, sure, and that relies on some technology (like every other company in the world). But it's not a tech company at all.<p></i> I'm not saying that Facebook isn't impressive, technologically. I think Facebook has a lot of things to offer, e.g. scaling, building the world's largest real-time chat system, impressive amounts of work into user interfaces, and, as the article mentions, impressive amounts of work into analyzing user behavior.

You gotta be kidding me. Social media will leave nothing behind? How about a communications infrastructure spanning the whole world and connecting people to both friends and other people of interest in real-time, no matter where they are (in the bus, in the street, at home, at their computer), enabling the most rapid spread of information ever seen, and potentially enabling the world to start functioning as a sort of "human computer", with intelligent sensors and intelligent nodes (people) and lightning fast communications between them?<p>How can you point at that and say that Twitter and Facebook are wasting their time?

"Hammerbacher looked around Silicon Valley at companies like his own, Google (GOOG), and Twitter, and saw his peers wasting their talents. "The best minds of my generation are thinking about how to make people click ads," he says. 'That sucks.'"<p>Man, I love that quote. Advertising is a pestilence. The real problem with ads is that they invariably take the form of insincere communication. As such, they are fundamentally at odds with the open and thoughtful (on a good day) nature of the Internet.

<p><pre><code> The best minds of my generation are thinking about how to make people click ads </code></pre> Best minds of any generation have always thought about ways to make money.<p>That doesn't mean that the world doesn't benefit from side-effects. Information is at your fingertips because of companies like Google and Yahoo. Staying connected is easier then before because of companies like Facebook and Twitter.<p>And speaking about infrastructure; since 2000 lots of cool things happened, like cheap cloud-computing (EC2, Rackspace) or open-source projects that can kick start your company straight at Google-scale if needed (Hadoop). Not to mention research papers that happened because of these companies.

Throughout much of history many top scientists have devoted their lives to finding better ways to kill people. Advertising is merely a more humane alternative.

"The four most expensive words in the English language are 'this time it's different.'" - John Templeton

The headline is terrible. The idea that much of the value generated in startups is by quants optimizing numbers is interesting.<p>The critique that web companies don't leave a technical legacy is not really valid. Most businesses don't leave a legacy.

If social really did help to tip the scale in the Middle-East revolutions, that alone was worth it.

Humanity does seem to have a predilection to devoting its brightest minds to unproductive activities. How much better would the world be today if the hot job of early medieval times was medicine instead of producing manuscripts? Science instead of theology? Science instead of stock market analysis? Just repeating a pattern...

I liked this quote:<p>"The best minds of my generation are thinking about how to make people click ads. That sucks."

The content seems very anecdotal - I see a lot of conclusions being drawn from a few examples in 'hot' startups like Facebook, Zynga &#38; Color which represent only a fraction of SV startups (and are possibly outliers).

I admit to not having read the article yet, but every time I see "this time it's different" it's a warning sign of delusion.

yup, and this time it's mostly about unwinding desktop/workstation motifs, as well as single app as moat, apps are now fluid points of integrated services. we're going to learn how to unwind our boxes into all kinds of things. it feels like more of a baroque bubble, emotionally we'll change ... and that leads to opportunities.

Different? <i>Different?</i><p>Here's some reality surrounding certain socioeconomic fads, including the "technology bubbles" we'll see intermittently for the next 100+ years since technology is becoming the only economic force that really matters. The visible winners and value-harvesters are usually idiots who got lucky. We look at what they're doing and we say, "When the tide goes out, those lucky, no-talent assclowns will have left us with nothing." The people getting invited to the "hip" parties and the most exclusive events at SxSW are generally what you'd expect in the era of social douchebaggery: people who are too busy partying to get real work done.<p>Okay, okay; but something else happens, and there's a silver lining here. While all the hipster douchewizards scramble for visibility and credit and the image of "A-player" status, progress still continues. Somewhere under all that smoke are the invisible people who are the <i>real</i> A-players, usually taking home a "B" or "C" outcome. You rarely hear their names (sometimes you do, but there are too many of them for more than 0.1% of them to achieve real notability) but they're the ones doing actual work and building great things. And in 2025, when all the "social media" robber barons are either washed-up billionaires or washed-up and penniless, the work that the <i>real</i> A players are doing right now will still matter. The applications of their work may have died out, but their work will still be around and people will be putting the ideas to better use.

Yes, that's true. It's 2011, not 2006 (Web 2.0 bubble) or 1999 (Dotcom bubble). Totally different.

I've been investing for a long time. I've lived thru two bubbles already- the dotcom bubble and the housing bubble. I lost money in the first and made a killing in the second.<p>I won't say whether this is a bubble or not, but the number one thing I look for is businessweek (or newsweek) saying that "things have changed!" A mainstream publication putting the bull market on its cover is the prime indicator that it is a bubble and that it will be a painful crash.<p>It is almost a cliche.<p>The real bubble right now is in the dollar. We've been able to inflate, an export that inflation, for nearly 100 years, and we got away with it because of military might and manufacturing might (and bretton woods). 2 of those 3 are gone and the last one is losing respect rapidly. It is gonna be a bloodbath when those dollars come home to roost. (and it will kick off a bubble in gold.)<p>Maybe the bursting of this "tech bubble" (if we're in one) will be the trigger that causes the end of the dollar bubble.<p>Unfortunately I'm not aware of business week putting the dollar on the cover and saying "This time its different". (But maybe one of their covers for gold will count.)

This Time is Different: A Panoramic View of Eight Centuries of Financial Crises<p><a href="http://www.economics.harvard.edu/files/faculty/51_This_Time_Is_Different.pdf" rel="nofollow">http://www.economics.harvard.edu/files/faculty/51_This_Time_...</a>