The 1990s Stock Bubble Was Much Crazier Than People Remember

Now that was a bubble.

Photo by Tim Boyle/Getty Images

Another day, another article comparing today’s lofty social media valuations to the 1999 tech stock bubble. The problem with all these articles is that the 1990s were much crazier than people remember.

I knew of a startup back then that was essentially what we would call a “content farm” today except it was paying people $2 a word. Or consider a company whose business model was perfectly sensible, like Microsoft. In 1999 Microsoft was worth $642 billion. That’s about $900 billion in today’s dollars. That’s more than Apple and Google combined are worth today. Is Snapchat crazy to turn down $3 billion? Maybe so. But in 1999, Webvan had a market cap of $8 billion—more than triple Snapchat’s price when you adjust for inflation. And while Snapchat may not have anything as old-fashioned as revenue, at least it doesn’t have Webvan’s massive cost structure.

Or consider whose business plan was to pay people to deliver stuff to you without charging you anything.

I climbed Mount Washington in New Hampshire one time. It’s a really high mountain. I was very tired by the time I got to the top. Nobody should trivialize it. But it wasn’t Mount Everest. By the same token, whatever it is that’s happening in Silicon Valley today it just doesn’t remotely compare to where we were 15 years ago.