Andreessen denies Internet bubble, advises Times to stop printing

Wed Dec 12, 2012 1:37pm EST
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By Sarah McBride

SAN FRANCISCO (Reuters) - Far from experiencing a bubble, Silicon Valley has been in the throes of a "technology depression," Netscape co-founder and venture capitalist Marc Andreessen said at the New York Times Dealbook conference on Wednesday.

While conventional wisdom holds that social-networking website Facebook Inc's initial public offering pricked a bubble that was taking hold around privately held consumer Internet companies, Andreessen expressed skepticism.

"Some bubble," he said, arguing that bubbles are "mass frenzies" that involve public companies. "If it's a bubble, it was a bubble that was limited to four companies, that was limited to the private side."

Andreessen did not name the companies. Consumer Internet stocks that have disappointed investors lately after their IPOs include Facebook, Groupon Inc and Zynga Inc.

To bolster his case, Andreessen said publicly held technology stocks were trading at the biggest discount to industrials since the 1970s.

For example, he said, Google Inc's stock price reflected valuations of zero for many of the company's key businesses, such as video service YouTube and browser Chrome.

"The public right now hates technology, just hates technology," Andreessen said. "We're in a tech depression."

Part of the problem, he said, is a belief in some circles that old-line technology companies are "doomed." But Andreessen pointed to Apple Inc as a company that many people had written off but which managed to pull off a stunning turnaround in the early 2000s.   Continued...

Marc Andreessen, co-founder and general partner of venture capital firm Andreessen Horowitz, speaks at the Iab Mixx Conference and Expo in New York, in this October 2, 2012 file photo. REUTERS/Mike Segar/files