A great way to look at the tech bubble from a guy that survived the last one
But during the Internet bubble of the late 1990's he was known as the CEO of Launch Media, a dotcom-era music discovery service that Yahoo bought in 2001.
When he needed more cash to make his company grow, he took it public, like lots of other dot-coms of the day.
At the height of the bubble, March 2000, Launch Media was worth about $300 million, Goldberg told us. By the time the sale to Yahoo closed 15 months later, the bubble had burst.
His stock was down 91%. Yahoo's stock was down 94%. All told the sale was worth about $15 million, he said, which was enough to give a healthy payout to some of the early employees. But "No, it wasn’t a great exit," he said.
We asked Goldberg how he feels about today's high valuations, which many people believe is Bubble 2.0.
I don’t know that it's going to be a bubble and that all of these companies are going to go out of business.
His take? Yes valuations are crazy. No, this isn't incredibly dangerous.
Business Insider: You went through the first tech bubble. Are we in a bubble now?
Dave Goldberg: I do think valuations today, they do seem in certain segments to be getting out of control.
Valuations are getting ahead of themselves because interest rates are still really low and that’s what happens when interest rates are low for a really long time. It's going to impact returns.
BI: So what are your criteria for a "real bubble"?
DG: I don’t think we’re seeing what we saw then, which was anything with a "good name" was raising tons of money and there was no business proof.
These are real companies, most of them, not all of them but the vast majority. I don’t know that it's going to be a bubble and that all of these companies are going to go out of business.
I remember in my area, there was a company called MP3.com that was doing something that was clearly illegal [sharing music], with no revenue and was worth a couple of billion.
And Yahoo almost bought Napster for over $1 billion. That stuff isn’t happening. When we see that sort of thing happening, we can call it a true bubble.
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