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Is Tech Bubble 2.0 Ready to Burst?


Despite sky high valuations, investors have little to fear.

Facebook? $50 billion valuation. Groupon? $15 billion. Twitter? $3.7 billion.

That's a lot of billions. Leading some to wonder if we're on the cusp of tech bubble 2.0. After all, these numbers look a lot like the sky-high numbers we saw in the 1990s.

But that was then, and this is now. And there's a significant difference between the 90s dotcoms and the ones today. For starters, these companies are actually making money. Facebook reportedly generated $1.2 in revenue and $355 million profit during the first nine months of 2010.

Investors are certainly taken with tech; the PowerShares QQ Trust ETF (QQQQ) with holdings including Apple (AAPL), Google (GOOG), Microsoft (MSFT), Oracle (ORCL), and Amazon (AMZN) is already up 5% this year, and 25% in the past six months.

But for investors, the nagging question remains: just how bubbly could this bubble be?

(Also read Damian Thompson's Groupon's a Sure Thing -- Right? and 2011 Tech IPOs: Party Like It's 1999 (or 2000).)

Join Josh Lipton for a closer look.

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No positions in stocks mentioned.
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