Off the Fence - Is there going to be another dotcom crash?

by Media Week, Media Week 20-Nov-07

NO - ED LING, DIRECTOR OF STRATEGY DEVELOPMENT, I-LEVEL

There have always been people prepared to invest in businesses that are
crap. Throughout the dotcom crash, despite the markets tanking,
thousands joined the internet every day and thousands of businesses made

money. With a 50% growth in homes with broadband predicted over the next

few years, the market opportunity continues to expand. Some businesses
will make big hits.

NO - AARON DIGNAN, PARTNER, UNDERCURRENT

The digital economic boom is based on the idea that consumer
participation and two-way conversation benefits brands and people alike.
Developers such as Adobe are considering moving their applications
online, while Google has essentially created a free version of Microsoft
Office. What used to be speculation is now experimentation and, for
some, great success. That trend will continue.

NO - ALEX DE GROOTE, MEDIA ANALYST, PANMURE

In the UK there aren't many stock market-quoted internet businesses. The
ones that are here are of a reasonable size and trading on quite high
valuations; they're of a much higher quality than those of five years
ago. In the case of social networking sites, the companies are not stock
market-quoted and could be a bit faddish in the three-year view. But
they can't crash if they're not quoted in the first place.

YES - LORNA TILBIAN, MEDIA ANALYST, NUMIS

The sector is very different now than in 2000. Then, it was on an
average price/earnings ratio of 42 times; now it is only 14 times, so
there's not that big a valuation bubble for traditional media companies.
Traditional media is on a much lower valuation than during the last
peak, but new media is on very high valuations. Sadly, everything in
markets reverts to mean - things go boom, then bust.