Pueng Vongs, Y! SF Editor
It may be difficult to think of the Bay Area in an economic bubble right now. Home prices are languishing, and jobs are still struggling to come back.
But a new report from the Street points to the “second coming of tech spending.” It is fueled by the heady potential of such companies as Zynga and Twitter. But this growth is a tenuous one, writes Jason Notte, putting our area solidly on bubble status.
San Jose/San Francisco/Silicon Valley is one of five U.S. regions identified by the site that lean heavily on one industry and could be ripe for a financial crash.
Notte writes that cities like hi-tech-heavy San Jose are all too familiar with industry busts.
“After the tech boom of the late 1990s pushed the Nasdaq to 5,132.52 in March 2000 and its subsequent collapse drove it to below 2,500 by that December, Silicon Valley high-tech industries dropped off by 17% and roughly 85,000 jobs just disappeared by 2008, according to the Bureau of Labor Statistics. Jobs in the Internet community, telecom, and data processing alone declined 26% between 2000- 08.”
He says things are different now but there may be cause for concern.
“Though the amount of venture capital flowing in for the little guys last year is less than a quarter of the $8.5 billion that came rushing into Silicon Valley at the peak of the tech boom, according to Thompson Reuters, Tesla’s IPO last year, the rising star of Facebook’s still 20-something Mark Zuckerberg, and the renewed presence of big money and big risk in the air still has locals and some investors nervous.”
According to Notte even tech giants like Google, Cisco, and Intel are keeping close watch on the financial moves of Apple and Microsoft before plotting their next moves.