Friday, September 28, 2007

USAToday Proclaims Another Dot-Com Boom (And Bust) is Underway

Need proof that another dot-com boom is underway? Consider Jangl, Jaxtr and Jajah.
They're not part of a Scrabble game gone horribly wrong; they're names of Silicon Valley-area tech start-ups. And they don't just sound alike. Each offers a similar product — a type of Internet telephone service — and is about a year and a half old. Standing out would be tough even if it weren't for the more than a dozen other companies in the same market. Yet Jangl, Jaxtr and Jajah have collectively raised almost $50 million in venture capital. They're not that unusual. The tech industry — especially in Silicon Valley — is once again trying to do business like it's 1999. U.S. venture-capital investment in the first six months of the year jumped 9% from the previous year, says a study from VentureOne and Ernst & Young. That's helped make jobs plentiful, parties lavish and tech entrepreneurship hip again. And ground zero once again seems to be Northern California, with its cluster of venture capitalists, start-up lawyers and dot-com veterans. But undermining the optimistic atmosphere is a huge question: How long can it last? Competition in some Internet markets — often referred to as Web 2.0 businesses — is intense. Marshall counts 34 new companies alone that want to serve one small niche: letting businesses and other groups build their own social-networking sites. Even entrepreneurs say a bust could be looming. They're just hoping to be among the survivors, or to cash out before the next crash. "Our Realtor — the person who found us this office — is doing a start-up," says Jangl CEO Michael Cerda. "Things need to get reeled in."
http://www.usatoday.com/money/industries/technology/2007-09-27-boom-2_N.htm

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