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.