Banks invest large funds in technology, customers with money and institutions want to have shares of new companies, the expectations of the digital market is part of several important buildings like Wall Street, debuting in them … In this situation, many Investors with present memories of what happened with the dot com and wonder if this sudden explosion will not endanger the entire economy once again.

Valuations have skyrocketed. Investments in Facebook and Zynga have quintupled in recent years. Groupon already has an initial official public offer of 25 billion dollars, when less than a year ago its initial value was 1.4 billion.

Roger McNamee, a private investor and also with shares on Facebook, said he is concerned “that investors believe that all social businesses will be as good as Facebook.” McNamee created the Silver Lake Partners private equity fund in 1999, when the boom occurred. “You have an attractive set of companies at the moment, but it would be very surprising that the new ones have as much impact as the first.”

Thomas Weisel, founder of an investment bank with the same name, says he is “surprised” by the amount of money that now floods the market. “I think it’s much bigger today,” he said. “The capital funds sought by these internet companies are much higher today than in 2000.”

However, there are notable differences between the dot-com boom of the end of the century and this one. On the one hand, the stock market is not saturated with offers. In 1999 there were 308 IPOs of technology, accounting for about half of that year’s offer, according to Morgan Stanley data. In 2010 there were only 20 of these offices.

More importantly, the newly created technology that has brought so much interest from investors, they have real businesses and they are not just on the web. Companies like Facebook have fast-growing revenues. Groupon, which is profitable since June 2009, is on track to have billions of revenues this year. And since 1999, when 248 million people were online (less than 5% of the world’s population), broadband Internet has become a common currency.

“In those days there were small companies, few companies that had a business plan,” said Stefan Nagel, an associate professor of finance at Stanford. With such a small, elite group, the possible consequences if things go wrong, would be limited. “Yes, we have a frenzy again,” said Lise Buyer, the principal of Class V Group, “but the frenzy is in a very select group of companies. Facebook is clearly the main one, but there are a few more that they want to play. ”

For Wall Street, the initial attraction for new Internet companies in the 1990s was the opportunity to earn shares in the companies of the market. At its peak, in 1999, the industry posted $ 1.3 trillion in underwriting expenses, according to Thompson Reuters data.

But as enthusiasm increased, many companies also rushed to make investments for their clients, which led to the bankruptcy of several entities and banks. “The investment funds that we made in 2000 were very bad, because many of these companies went from providing a public offering to bankruptcy in a few months.”

Philip A. Cooper, who in 1999 was part of Goldman Sachs, recalled that investors were crying out for more and more technology. Yielding to pressure, he created a fund of 900 million dollars, which despite the frenzy, remained on the limit. “There was a lot of demand, but we could not see any prudent way to put all that capital to work,” Cooper said.

“We thought our money would double in just a couple of weeks,” said Howard Lindzon, a hedge fund manager and former investor at carsdirect.com. “Everyone crowded into things that were considered hot and sexy,” Paul Meeks said.

Today, the collective amount of money that Wall Street banks are pumping into new Internet companies makes them among the top in terms of risk capital, which is a big concern for investors.

“As cash continues to accumulate, the fear is that so much can not be put to work in a responsible manner,” Meeks said. “When you see the evaluations that are handled in the market, I think, boy, that it will be better in special companies,” he concluded.