Facebook stock shed more than 40 percent of its value, and almost every other tech stock slid, too, including Twitter, TripAdvisor, and Salesforce.com (which acquired Microsoft last month). After a third of the restaurants in New York, Los Angeles, and San Francisco declared bankruptcy, largely as the result of too many half-off meals through services like Groupon and LivingSocial, eateries began to boycott the services.
The Nasdaq’s “Daily Deals’’ index, which includes the 25 largest publicly traded companies that peddle discounts by e-mail, slid 68 percent this past week.
By mid-January, angel investors and venture capitalists were tweeting, blogging, and thwacking about their intention to stop making new investments until the dust settled. (Thwack, the once-popular service that enables live video-casting from inside public restrooms, announced its first-ever layoffs this month.)
It feels as if a bubble has burst — especially to those who remember the dot-com implosion of 2001, the Wall Street crash of 2008, or the cupcake catastrophe of late 2011, when thousands of cupcake bakeries across the country went bust.
So how did we get here? Let’s look at some of the key moments:
May 2011: Shares of LinkedIn, a website that makes it easy to harangue former co-workers for favors, jump 109 percent on the day of its initial public offering.
June 2011: Groupon files to go public. Game developer Zynga, known for obliterating office productivity with online games like Mafia Wars, follows.
July 2011: Intensifying the trend of “acq-hiring,’’ when big companies buy small start-ups solely for their talent, Google pays $155 million for a “social TV’’ start-up called Remotr, only to learn that the company consists of a 14-year-old girl named Charisse and her pet ferret.
August 2011: Your accountant, your Uncle Sal, and the garage attendant at your office building all confide they are cultivating start-ups on the side.
