reyonthehill

While reading about the failed Microsoft-Yahoo bid (which may still happen), it was mentioned how Yahoo! has historically overpaid for the acquisitions it has purchased over the years, including nearly 5 billion dollars spent on GeoCities, the personal homepage service (now mostly defunct), in 1999. Ahh, the height of the dot-com bubble.

Graphing the full historical record of the NASDAQ index shows us how steep that bubble actually was...

Image: CNN Money.com

This plot shows the trend that the technology sector is on today is pretty much the trend that the sector would have been on if it weren't for the period of "irrational exuberance" that took over in the second-half of the 90s. The most-recent downturn may be a temporary release of pressure, although larger in scale than typical releases, or it may be a response to the current credit crisis.