Off the fence - Is there going to be another dotcom crash?

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Media Week

20/11/2007

NO - ED LING, DIRECTOR OF STRATEGY DEVELOPMENT,
I-LEVEL
There have always been people prepared to invest in businesses that are crap. Throughout the dotcom crash, despite the markets tanking, thousands joined the internet every day and thousands of businesses made money. With a 50% growth in homes with broadband predicted over the next few years, the market opportunity continues to expand. Some businesses will make big hits.

NO - AARON DIGNAN, PARTNER, UNDERCURRENT
The digital economic boom is based on the idea that consumer participation and two-way conversation benefits brands and people alike. Developers such as Adobe are considering moving their applications online, while Google has essentially created a free version of Microsoft Office. What used to be speculation is now experimentation and, for some, great success. That trend will continue.

NO - ALEX DE GROOTE, MEDIA ANALYST, PANMURE
In the UK there aren't many stock market-quoted internet businesses. The ones that are here are of a reasonable size and trading on quite high valuations; they're of a much higher quality than those of five years ago. In the case of social networking sites, the companies are not stock market-quoted and could be a bit faddish in the three-year view. But they can't crash if they're not quoted in the first place.

YES - LORNA TILBIAN, MEDIA ANALYST, NUMIS
The sector is very different now than in 2000. Then, it was on an average price/earnings ratio of 42 times; now it is only 14 times, so there's not that big a valuation bubble for traditional media companies. Traditional media is on a much lower valuation than during the last peak, but new media is on very high valuations. Sadly, everything in markets reverts to mean - things go boom, then bust.

Read the full article on Brand Republic

Ed-Ling