Has it really been over five months since my last post? I really am terrible when it comes to therapeutic writing…sorry to make you wait!
To be honest, lately I’ve been going through a bit of a writer’s block. But as one of my English-major friends bluntly said with astounding simplicity, “Jacky, if you’re writing, then you’re not in a block.” So, let me just start from there.
I haven’t read nearly enough books this summer, but I did manage to finish a couple novels and short stories by the famed Haruki Murakami. The Japanese author is most celebrated for his use of imagery between realism and illusory lines, yet, personally, I’m just amazed anyone could write with such fluency. I mean, who else could purposefully describe a young male working in a record store? And take up five pages doing so? And make me enjoy reading that? It’s a rare talent, for sure.
Anyhow, what I really wanted to talk about is the rumored financial bubble within the tech industry. However, since there are far too many intricate parts, (Translation: Not everyone will be interested in this possibly mundane topic) I will attempt to emulate Murakami’s style of prose and not drift too far into my ramblings. Have a reason behind every detail and lead every sentence back to a main idea. After all, simplicity is key.
But if you absolutely do not care, at least read this short story by Murakami.
Now, let’s start from the beginning.
What is the meaning of a bubble in economics? In its very basic concept, this is when something becomes more valuable than it really is. For example, during the golden years of the Dutch empire, tulip bulbs became so popular that one bulb could be used to buy a house!
Likewise, some economists today believe that the products of Facebook and Groupon have also become overvalued. Both companies have drawn widespread attention not only for its ingenuity, but also the amount of funding invested in its upkeep. For many financial analysts, the uncertainty remains, “What if the investment is not worth it?”
It’s similar to questioning if Lebron James is overrated. But that’s a story for another time.
For economists (and soap bubble enthusiasts alike), the scary part of having a bubble is that it is likely to burst at some point. In the case of the tulip craze, this meant that, after a certain point, everyone had spent their life savings on the bulbs. Because everyone now possessed the bulbs, demand for the flowers fell, causing the price of a tulip bulb to plummet dramatically. Suddenly, the Dutch people were left with worthless flowers and no money for food and shelter.
Pop! And the bulbs were no longer so valuable.
Learning from history, many researchers are beginning to question the web-based corporation giants. For all it’s worth, Groupon simply posts deals from merchants, Facebook reconnects old high school friends, Twitter lets me know when a colleague is eating, and Google lets others search for “I am terrified of Chinese people.” Are these creations truly worth billions of dollars?
While an existing tech bubble is unlikely, the high valuations of these web-oriented firms could lead people to invest heavily in the upstarts of web-based networks and companies, hoping to receive comparable profits and successes. Without a doubt, the added competition would help to accelerate innovation, yet there could also be a vast array of imitation Facebook sites and failed products. In short, many more billions of dollars could be spent before investors realize that the world only needs so many ways to ‘poke’ a friend.
Okay, I think I have rambled off a bit much, so I’ll leave you with one last question: Where do you think the tech industry is headed?
