I guess the biggest difference between the Web 1.0 bubble and the one we may be experiencing now is that no one this time thinks the Internet will suffer long-term damage even if stocks should founder badly. That actually was a fear among some during the first stunning downturn, that it had all been a flash in the pan, that we’d mistaken a frenzy for a fundamental shift. It was silly, of course, even if the jolt to the big-picture economy was painful. As had been the case with earlier, non-virtual gold rushes which left new cities in their wake, the infrastructure built in support of the burgeoning media ensured something more permanent had been realized. 

In his WSJ piece “Why This Tech Bubble Is Less Scary,” Chris Mims explains why this “frothy” period won’t be similar to the last one. Of particular interest is his analysis of tech companies floating on private money and what a market correction might mean to them. The opening:

Is tech in a bubble? I think so. The signs are all around us. The good news is, it’s nothing like the last one. Plus, for reasons that go beyond the usual impossibilities of economic prognostication, no one can say for sure what’s going on. Many people seem to find this reassuring, but we would be wise to heed the lesson that a lack of transparency about the mechanics of a market rarely leads anywhere good.

But first, let’s define what kind of a bubble tech might be in. It isn’t like the bubble of 1997-2000, the Kraken of legend that came from the depths to wreak havoc on the whole of the U.S. economy. That was a genuine, old-fashioned stock market bubble, with money pouring into publicly held tech companies that couldn’t justify the investment.

If I’m right, and what we’re experiencing now is a kind of Bubble Jr., any correction will be less widespread.

In 2015’s less-terrifying sequel to 1999, everyone is to be commended for avoiding the worst excesses of the past, the empty vehicles for irrational exuberance like Pets.com.•