A Silicon Bubble Shows Signs Of Reinflating

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A Silicon Bubble Shows Signs Of Reinflating

A Silicon Bubble Shows Signs Of Reinflating

http://dealbook.nytimes.com/2010/12/03/a-silicon-bubble-shows-signs-of-reinflating/?hp

Evan Williams, left, who has started several Internet companies, including Twitter, and Fred Wilson, a venture capitalist who says investors are eager to participate in young start-ups

These days in Silicon Valley, a billion dollars seems downright quaint. The enthusiasm for social networking and mobile apps has venture capitalists clamoring to give money to young companies.

The exuberance has given rise to an elite club of start-ups — all younger than seven years and all worth billions. Successive investments in Twitter have reportedly increased its value 33 percent, to $4 billion, while Zynga, creator of the popular Facebook game FarmVille, is worth more than $5 billion.

Google was willing to pay $6 billon for Groupon, an online coupon company that was valued at $1.35 billion only eight months ago. And Groupon was willing to reject the bid on Friday evening, presumably because it could sell for even more money later.

Less than a decade after the dot-com bust taught Wall Street and Silicon Valley investors that what goes up does not keep going up forever, a growing number of entrepreneurs and a few venture capitalists are beginning to wonder if investments in tech start-ups are headed toward another big bust.

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