Credit Crisis Spreads a Pall Over Silicon Valley

http://www.nytimes.com/2008/10/03/business/03valley.html?_r=1&hp=&oref=slogin&pagewanted=all

by browser411 • 18 years ago

20 6 18 years ago

sutro• 18 years ago

"Twitter for dogs." Classic.

Seems like business as normal. I couldn't tease any palpable changes from that article besides a general feeling of worry.

iamelgringo• 18 years ago

It's only a crisis if you're relying on VC funding for your continued sucess.

RyanGWU82• 18 years ago

Or, you know, if you use credit.

It's going to be very difficult to run a company like TiVo which takes a loss up-front but which makes a considerable profit on subscriptions. On the whole, each TiVo subscribe is highly profitable, but companies like TiVo need credit to fund new customer acquisition costs.

Likewise, if your customers are usually buying your products on credit, you're also going to start having big problems. Many enterprise companies -- hardware and software -- are used to leasing their products to big customers. Without easy financing, it's going to become more difficult to sell both hardware and software.

Plus indirectly, even if you don't use credit directly, your customers might. ERP software for the auto industry may help them save billions of dollars, but if people aren't buying cars, they won't be buying new ERP software. B2C companies aren't immune either. Unemployment and increased consumer savings will reduce the amount of disposable income that consumers have to spend on tech goods and services.

It's a crisis for all parts of the economy, and I don't see how the tech industry is any different.

gamble• 18 years ago

It's worrying how the IPO market has become completely moribund - has there been a significant tech IPO since Google? I can't think of one offhand. It makes me wonder what will happen if the credit crunch makes established companies less willing to part with cash or borrow to acquire the way they have in the past.

bigmac• 18 years ago

VMWare was pretty significant, despite their less than stellar performance lately.

Credit Crisis Spreads a Pall Over Silicon Valley

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