It was a time of euphoria and not to mention instant, effortless wealth for many. The NASDAQ was soaring out of control. Hundreds of Internet and technology-related companies were making their facile entry into the stock market. Many of these companies saw their stock double within the first day of going public. Venture capital was being tossed around like Monopoly money.

Dot.com companies were agglomerating like “birds of a feather” in Silicon Valley and other so-called high tech corridors. Other technology and information-related companies were also thriving and all parts of the the nation found itself prospering.

The map below provides a visual perspective of this growth. It shows where Information and technology-related firms were popping up and where existing firms in the sector were expanding during the height of the Internet boom (1998-2001). The source of the data is the U.S. Census and the data is reported at the county level.

It was, as Robert Schiller noted, “irrational exuberance.” In March of 2001, the market eventually crashed. Companies like Pets.com had become tremendously overvalued in the market, their revenue projections were set unrealistically high and in the end they weren't making enough money to cover the heavy investments they had made at the onset of their companies and along the way to expand operations.

Web 2.0 Mania and A Little Bit of Politics

Now, some seven years later, some are proclaiming “déjà vu!”. It’s the Web 2.0 craze and the emergence of a new breed of Internet companies centered around social networking, sharing, and interactivity. Web 2.0 terms like “mash-up”, wiki and blog are quickly making their way into mainstream vernacular and the number of companies that fall into the new-Internet are growing at a rapid pace.

Web 2.0 is gaining great momentum in the political arena. There is not a single 2008 presidential hopeful who isn’t in some fashion using Web 2.0 to promote their cause and foster dialogue. The Internet has essentially become a ubiquitous and omnipresent townhall meeting. And it’s paying off. Obama leads the pack. He has raised nearly 7 million dollars through this site My.BarackObama.com and from other online outlets.

The media superstar CNN recently joined hands with YouTube in a project that gives voters an opportunity to pose video taped questions for the candidates. The social networking site, MySpace, will be holding an unprecedented virtual primary early next year. And scores of blogs devoted specifically to politics, like wonkette.com, have populated the Internet.

Internet Boom or Bust?

Some are asking: Are we In the midst of another Internet bubble and impending crash? Some say yes but, many are saying no. Web 2.0 is different. In many ways, the distinction comes down to value proposition.

The dot coms of the 90's were highly overvalued and it was the companies who characterized the Internet and dictated the value that consumers were seeking. When Time magazine named the person of the year as "You", that made a clear statement about intrinsic value of Web 2.0. "We" are creating the Internet and what we believe to be value. To me, that's priceless.

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