by Jared Levy on October 8th, 2010
Wednesday on CNBC’s Fast Money Halftime Report, we focused a good amount of time on the “cloud computing” sector. More specifically, we discussed the pummeling many of these stocks were taking on the day.
I think the phrase “cloud computing” now is analogous to “.com” in the late nineties. Back then, we knew the Internet was going to be big and would change many of our lives. What we didn’t know was which companies were going to be instrumental in not only bringing the net into our homes and workplaces, but also which companies would be able to leverage themselves the most through this new way of connecting the world.
The .Com Craze
Any company that had the suffix “.com” was snapped up by investors because they really had no clue as to how the landscape would shake out. Then of course there was the possibility that a .com company would be acquired by a larger company that wanted their technology, patents, or services. It was a free-for-all that made many people rich but also sent many to the poorhouse after the house of cards fell in 2000/2001.
In reality, the proverbial house of cards didn’t fall, per se; it came together and provided clarity. Soon, investors began to see which companies were going to triumph and which would falter in the Internet space.
Companies like eBay (NASDAQ:EBAY), Amazon (NASDAQ:AMZN), AOL (NYSE:AOL), and Yahoo! (NASDAQ:YHOO) – high-flying stocks in the late 90s – were brought back down to earth in terms of their price. Nevertheless, they were forming the foundations for how we did business on the net….