Is a tech bubble starting in the private equity market?
Here is an article about a popular app, Frontback, that declined to be purchased from Twitter. (Link: http://www.businessinsider.com/frontback-app-shuts-down-2015-7) Even Mark Cuban has a concern about how much money is being poured into technology apps within the PE market. Investors are trying to get in the “ground floor” of the “next big thing.” But with so many rounds of funding, it just drive the price up without any liquidity.
This leads to valuations of tech companies have become outrageously high. For example, WhatsApp acquired by Facebook had a price tag of $22 billion. Yet, Facebook stated they do not have a sense of urgency to monetize WhatsApp.
To me, it sounds like companies are spending lots of money with little return for the future. But, this also concerns me about our data. If companies can’t monetize their app, they will monetize the user data. Quite frankly, they state the data is anonymous, but it truly is not. They keep our IP addresses, locations, etc.
Outrageous high valuations and breaking the trust of user data are two of my concerns for the tech industry. I believe there is a bubble in the near future and to recover from that, user data will be sold at the expense of the consumer.
