The Next Bubble Crash: Social Networks/Communication

As we head deeper into the dull trading period that is this holiday season, you’ll notice a lot more articles about possible future occurrences or trends in the market.

Maybe its just me, but I have noticed a lot more news about various community/social network sites (i.e. Twitter, Facebook)… some are being offered deals, other are raising money, and a handful are rumored to go public.

With the economy being in such a dump over the previous couple of years, its obvious why there haven’t been many IPO’s or M&A’s, but at some point that is going to change and the volume will start to pick back up. To me at least, it looks like the “Internet” tech properties will lead the way here as these websites continue to raise a whole lot of cash.

Popular website, Yelp, just turned down half a million dollars from Google (GOOG). Twitter seems to be raising $100 million by the month, and Facebook’s value continues to soar (I think its at a trillion dollars now).

Just like in previous history, it only takes one event to initiate the action. As soon as one of these websites go public, it won’t be long before others join into the circus. Eventually we’ll have too much supply and standards will inevitably worsen.

Due to previous events such as the dot com burst in the early 2000’s and the recent housing crash, you would think investors would learn. Then again, history has taught us that bubbles come and go, yet people never really learn.

Where do you think the next bubble crash will come from?