Very astute thought from Dave Winer…

In the late 90s, the period of irrational exuberance, we knew the end would come, and we knew what the end would look like — a stock market crash of the dotcom sector. So, if Web 2.0 is a bubble, and if like all bubbles it bursts, how will we know when it happens?

I almost wrote a piece yesterday saying that since the Web 2.0 companies aren’t going public, they’re safe from busting in a visible, dramatic way. I almost said it will be hard to tell when the bust comes, it’ll be softer and slower, you won’t hear a crash or even a pop. But I was wrong, and today we got the first rumblings of the shock that will signal the end of the bubble.

Google stock will crash. That’s how we’ll know.

When I realized this, I should have known, because I’ve been saying for almost a year that Web 2.0 is nothing more than an aftermarket for Google. Startups slicing little bits of Google’s P/E ratio, acting as sales reps for Google ads, and getting great multiples for the revenue they generate by fostering the creation of new UGC to place ads on. When Google crashes, that’s the end of that, no more wave to ride, no more aftermarket, Bubble Burst 2.0. And the flip of this is also true — as long as Google’s stock stays up, no bubble burst.

Spot on. Google’s Price/Earnings ratio at the moment is around 60. That’s nuts.