The question becomes, will these young and hot entities go the way of early 21st century dot com busts like pets.com?
Are we seeing herd behavior again? People are afraid to "miss the next big thing". There are differences between 1.0 and 2.0. Most of the companies now are not traded on the stock exchange so there is no exchange bubble. Of course, that leads to questions of transparency and regulation in favor of investors.
But in this current environment, when money is hard to come by with ZIRP interest rates, cash is king. And some technology companies are sitting on a lot of cash.
[Microsoft, Apple or Google] have about $90 billion in case on their books. McKinsey & Company calculates that the largest software and hardware companies have enough excess cash on hand to buy nearly all of the tech industry's medium-sized companies.
The question in my mind is, how will these companies eke out profits? Will online advertising actually support these businesses in the long run?