GigaOM: Silicon Valley Should Be Worried

GigaOM has a bleak report about the state of Silicon Valley—just the thing for a cheery Monday morning. “At the turn of the century, everything went to hell with the dot-com bust,” the report said. “Then the pendulum started to swing the other way; the pessimism that once reigned supreme was being replaced by wild-eyed optimism. Now Silicon Valley is in for a long-overdue reality check, one that should worry one and all. Why? Because the news coming out of advertising-focused companies is not good.”

Despite our sarcasm, the report may be on to something. It goes on to list several examples of bleak earnings reports from stalwarts such as ValueClick, Time Warner’s Platform-A, Microsoft, and even Google, who reported 39 percent profit growth but still fell short of analyst expectations with regard to online advertising. A drop in online and mobile advertising would have repercussions throughout the tech industry.