Wall Street Fear Vs. Silicon Valley Greed

Posted by: Rob Hof on January 17, 2008

From his elliptical trainer, Fred Wilson has an interesting thought (among many others) that I’ve been wondering about too:

Wall street is in fear mode while silicon valley is still in greed mode. Can the two coexist peacefully?

I have a feeling they’re going to conflict before long, assuming the troubles among financial companies last as long as it appears they might. But it hasn’t happened yet. Despite some worried glances over their shoulders, people in Silicon Valley still seem to be more of less blissfully raising money, creating startups, making stuff, and generally wondering what all this fuss about economic troubles is all about. Even Intel, whose stock took a drubbing yesterday on a soft first-quarter forecast, said it’s not seeing a recession yet. And if you’re developing ad networks or Facebook applications, life looks pretty sweet.

Maybe Silicon Valley’s relative calm is an indication that the economy is not in as bad a shape as the travails on Wall Street make it seem. Wouldn’t that be nice? But I’m doubtful. At some point, it seems like a tanking economy has to hit the Valley (it already has hit tech stocks). I wonder if the next shoe to drop will be in advertising, which drives so much of the new Web economy and the startups hoping to hit it big. I don’t see big signs of trouble yet, but I just wonder how long online ad growth can escape the cyclical nature of advertising.

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Reader Comments

dg

January 18, 2008 10:48 AM

With all the video stuff going on I worry more about the ISPs closing in for the kill with jacked up rates and metered amounts of downloading.

Seems like no one cares about page smaller anymore. They get bulkier and bulkier with ajax toys and video.

Ray

January 18, 2008 02:57 PM

Seems maybe the crazy amount of money being thrown around at every application that comes out might dry up a little, so the fifteen year old neighbor down the street won't have an IPO before I can get my visa paid off, but as far as advertising dollars, I can't see that well drying up anytime soon. On-line advertising is here to stay, and in a VERY BIG WAY.

Ben

January 20, 2008 01:08 PM

Online advertising will only continue to stay in a 'very big way' IF, and only IF, consumers continue to spend online. If the 'R' happens, and online spending craters, which companies will continue to pour money into online ads?

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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