Modelling economic bubbles: is Web 2.0 next
Modelling economic bubbles: is Web 2.0 next
The Web 2.0 phenomenon has produced a number of technology companies that in various rounds of venture capital funding, have attracted very indicative valuations. Following these rising valuations, Investment Banks took an interest in the sector. However, while the companies concerned seem stable as private entities, their novel approach to business makes their financial characteristics difficult to predict.
Parallels are drawn between the 2001 dot-com bubble and the current Web 2.0 sector. This thesis highlights a dependency between modern highlights a dependency between modern web companies, and the established technology sector. It aims to identify the extent to which the contemporary technology sector (encompassing Web 2.0) has exhibited characteristics similar to those of the dot-com bubble.
to that end, this thesis identifies characteristics of modern and historic bubbles, and uses them to formulate a hypothetical set of indicators, in the form of a conceptual model. To determine whether these indicators exist in real data, a novel, repeatable statistical test is developed. It first identifies statistical heuristics representative of bubble circumstances, and then compares other periods to them. Thus, given sufficient data, any period may be tested.
Periods are analysed prior, during and after the dot-com bubble. During the dot-com bubble, consistently strong venture capital activity is observed, and linked to the growth in people using the internet. This is indicative of the poor decision-making by investors, documented at the time.
In recent periods, patterns in venture capital investment describe an industry that is much more cautious that before, reducing the probability of the formation of a similar bubble. Looking at the past, this thesis observes investor activity that 'caused' the dot-com bubble as early as 1995-96, which raises questions about when the bubble started, and the lead-times on market collapses.
University of Southampton
Newman, Russell
1eb83ba3-1acc-4aad-8393-63749c7a2293
March 2015
Newman, Russell
1eb83ba3-1acc-4aad-8393-63749c7a2293
Wills, Gary
3a594558-6921-4e82-8098-38cd8d4e8aa0
Newman, Russell
(2015)
Modelling economic bubbles: is Web 2.0 next.
University of Southampton, Physical Sciences and Engineering, Doctoral Thesis, 123pp.
Record type:
Thesis
(Doctoral)
Abstract
The Web 2.0 phenomenon has produced a number of technology companies that in various rounds of venture capital funding, have attracted very indicative valuations. Following these rising valuations, Investment Banks took an interest in the sector. However, while the companies concerned seem stable as private entities, their novel approach to business makes their financial characteristics difficult to predict.
Parallels are drawn between the 2001 dot-com bubble and the current Web 2.0 sector. This thesis highlights a dependency between modern highlights a dependency between modern web companies, and the established technology sector. It aims to identify the extent to which the contemporary technology sector (encompassing Web 2.0) has exhibited characteristics similar to those of the dot-com bubble.
to that end, this thesis identifies characteristics of modern and historic bubbles, and uses them to formulate a hypothetical set of indicators, in the form of a conceptual model. To determine whether these indicators exist in real data, a novel, repeatable statistical test is developed. It first identifies statistical heuristics representative of bubble circumstances, and then compares other periods to them. Thus, given sufficient data, any period may be tested.
Periods are analysed prior, during and after the dot-com bubble. During the dot-com bubble, consistently strong venture capital activity is observed, and linked to the growth in people using the internet. This is indicative of the poor decision-making by investors, documented at the time.
In recent periods, patterns in venture capital investment describe an industry that is much more cautious that before, reducing the probability of the formation of a similar bubble. Looking at the past, this thesis observes investor activity that 'caused' the dot-com bubble as early as 1995-96, which raises questions about when the bubble started, and the lead-times on market collapses.
Text
Russell Newman Thesis.pdf
- Version of Record
More information
Published date: March 2015
Organisations:
University of Southampton, Web & Internet Science
Identifiers
Local EPrints ID: 381237
URI: http://eprints.soton.ac.uk/id/eprint/381237
PURE UUID: 8a98db37-294b-46fb-91f0-5b7b78775767
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Date deposited: 13 Oct 2015 13:36
Last modified: 15 Mar 2024 02:51
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Contributors
Author:
Russell Newman
Thesis advisor:
Gary Wills
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