Trends

A new internet bubble is going to burst

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People think that today, « it's a bad time to start a company". A bubble would be reinflating Internet businesses. In fact, valuations are rising. So are we or are we not in an Internet bubble? The debate flares up at industry parties, conferences, and in blog discussions.

Web 2.0: A new dot-com bubble in the making?

Lookat the interview tittled : « Web 2.0 has Internet money flowing again »

In the fourth quarter, 75% of startups with VC funding were valued higher than when they last raised cash — up from 60% a year earlier, according to Palo Alto (Calif.) law firm Cooley Godward. And acquirers have paid eye-popping prices for a few startups: eBay Inc. (EBAY ) shelled out more than $2.6 billion for Skype Technologies (EBAY ), and News Corp. (NWS ) forked over $650 million for MySpace.com (NWS ). In the last quarter, VC firms plowed $5.6 billion into 761 companies, up 12% from last year, says MoneyTree Report. But the history of Silicon Valley is done with many small bubbles that served to motivate entrepreneurs and investors without causing widespread harm. James F. Fulton Jr., an attorney at Cooley Godward says : "Silicon Valley needs champagne bubbles all the time to be percolating up for the whole system to work".

The Web 2.0 have some things in common with the Internet bubble, but experts note that there are also differences, including the low cost of entry for compagnies that launch blogs, wiki or social networking businesses.
According to industry observers, « The main difference is that this time around consumers are driving the adoption of the technologies rather than companies trying to force their Internet sites and wares onto users ».

Choose your definition of web 2.0:

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Joyce ==>

Need a loan but don't think you would qualify the bank? Try Prosper.com, the E bay of loans Prosper.com.

..Never heard about it before. this name rang a bell though..an old memory from my childhood: Snacks made of the ginger bread of Prosper the Bear !

Let's back to being serious. Propser.com is a website which unveils how deeply the society resorts and relies on the internet.

Would you agree to lend money to strangers on the internet? Would you borrow some money from them ? That's what Prosper.com provides. It's a form of online micro lending company partly founded by the creator of Ebay.

On Prosper.com the borrowers post listings on the loans they want and why , along with their credit scores and the interests they're willing to pay. Anonymous individuals then make offers to the borrowers they like, steading how much they're willing to lend and at what rates. Proposer CIO says "it's a lot like E Bay but for money".

Trust is at the core of this project. How can you be certain that the borrower will pay you back with the interests he agreed to?

Actually there is no assurance whatsoever..to me we could compare this more as gambling than investing. People tread directly their money without having to go through the banks. I think that it's a social experiment and people prefer dealing with with people online than banks.

However if we can't deny the risks of all of this, prosper does do a credit check of prospectives borrowers and assign a score from AA which is the best to HR which stands for High risks. The borrowers creates a profil with his picture, and tip in what it is they need the money for, how do they plan to pay it back, their career..anything that would help this lenders to get to know who they are.

The borrowers can also belong to some groups or communities on prosper.com, which help their reputation and enforce the rates they can get.

But TRUST is what Prosper is based on. One question needs to be raised: if the borrowers don't pay back the loans, does Prosper watch its back?

Indeed, if a borrower doesn't pay back, prosper.com would put him through the same consequences he would have with a credit card company or bank.

Prosper is one of the only lending websites which work so well..but to me, if problems are not to be seen in its futur, websites such as Prosper.com are certain to flourish.

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