06/28/2011 10:58 am ET | Updated Aug 28, 2011

Tiny Bubbles

For a media that was sent to the woodshed for helping to inflate and failing to predict two disastrous bubbles in a single decade -- dot-coms and housing -- perhaps it stands to reason that its motto these days seems to be "we won't get fooled again."

How else to explain the plethora of recent stories and headlines not just debating or questioning whether we're in a technology bubble, but declaring definitively that we are? Some favorites: "Should you brave the new technology bubble?" in London's Daily Mail and "Technology bubble raises fears of a Palo Alto housing bust" in crosstown rival The Telegraph. Is Britain even more bubble-obsessed than we are?

To be sure, most of these pieces are more concerned than convinced that there actually is a technology bubble, but in some ways, these are the strangest offerings of all, since they are forced to confront, well, facts. Take, for example, a story in the Financial Times on June 16 -- the day after online music service Pandora's hot, if quickly cooling, initial public offering. "Pandora's soaring debut stokes concerns of new internet bubble," the page-one headline blares. The story begins by explaining how Pandora "briefly soared by 60 per cent when trading began" -- a worrisome phenomenon it attributes to "a combination of ignorant private investors and financial opportunists on Wall Street." (Ignorant? Really? Exactly who is the FT referring to here?)

By the fourth paragraph, however, we learn that other hot tech IPOs, including China's Renren, had fallen back sharply since their debuts, and by the fifth, that Pandora's shares had given back most of their big gains by the close of the company's IPO day. In other words, forget the breathless headline and lede; by the end of the story, you're left to conclude there isn't really much of a bubble at all.

The Financial Times is hardly alone. The New York Times, in a June 20 page-one story on LinkedIn's blockbuster debut, contains this gem: "Now there are signs that a new technology bubble is inflating, this time centered on the narrow niche of social networking." A bubble in a narrow niche? Isn't that an oxymoron?

Indeed, aside from LinkedIn, Groupon, Twitter and everyone's favorite bubble bogeyman, Facebook, how many social networking stocks or potential stocks are we talking about here? Six? Seven? Even if the frenzied investing in this small group of companies does turn out to be a bubble -- far from a sure thing -- its bursting would hardly be a catastrophic event for the market or economy, but just for a single, cratering minisector. There were more than 300 publicly traded dot-com stocks in 2000 when that bubble burst.

No matter. The Times on June 20 flooded the zone (to borrow a phrase from the Howell Raines era) with tech bubble coverage, producing four stories (four!) not just on LinkedIn, but on tech startups in general and the venture capitalists who invest in them (the FT's ignorant investors, perhaps?). As one headline put it, a "Touch of Dread" that a tech bubble was inflating ran through all of the pieces, which were filled with tales of possible bubble excess, such as the fact that Melt, a company that plans to sell grilled cheese via mobile phones, raised $15 million from Sequoia Capital.

A little wacky? Yes. But bubbleworthy? Hardly. After all, private investors, ignorant or otherwise, make bets on all sorts of new and seemingly weird companies all the time. That doesn't make a bubble, which remains a relatively rare event.

This isn't to say that we aren't in the early stage of a social networking bubble that, if you believe these things are contagious, can lead to an overall tech bubble that will eventually lead to tears. But for all the media's determination to call it a bubble, it's hard to escape the fact that you can't define something as a bubble until it bursts. Another problem for the bubble-obsessed media is, of course, Pandora, which by the time the Times ran its front-page LinkedIn story was down 20% from its offering price -- a very unbubblelike drop that Reuters memorialized with the headline "Profitless Pandora Pricks the Tech Bubble."

The Times remained undeterred. Its LinkedIn piece noted Pandora's decline but switched right back to the "enthusiasm" surrounding bubble poster boy LinkedIn. How LinkedIn will ultimately fare is anyone's guess. But one thing is certain. The media's bubble obsession is only going to get more intense. After all, Facebook's IPO is less than a year away.