Mobile Bubble, Mo' Trouble

5:50 PM -- Facebook 's bid to buy Instagram for $1 billion has hipped many people and publications to the idea that the mobile social bubble is blowing up right now.

In reality, as I said last August, however, wireless has been buoying the bubble for quite some time now. One of the striking features of the investment so far, however, is how diverse the mobile startups getting funding are: everything from location-based social networking to mobile money to small cell developers.

The thing that worries me is that the massive money for Instagram could help to skew that spend. Venture capitalists are bound to chase the biggest rewards, and if that appears to be the mobile social networking sector, that could be bad news for us all -- as wireless users -- in the end.

Here's why: 4G and faster 3G data networking technologies are what allow you and me to send sepia-tinted pictures of our cat or ironic mustache to our ever-so lucky friends from our phone in the first place. But they are very much a work-in-progress right now.

The development of technologies like small cells -- tiny radios that sit at the edge of the network and speed up data transfers -- and better billing systems, amongst many other things, are crucial to the evolution of the broadband wireless data ecosystem in these early stages of 4G. VC funding has helped fuel development here so far.

Such technologies are clearly not as sexy as social networking on your iPhone. But if the VC people choose to solely chase the big bucks in the mobile bubble then the wheels that are actually helping to drive the wireless revolution could end up in a ditch.

The mobile social bubble will -- of course -- burst at some point, whatever happens. That's the nature of bubbles; we know that by now, or at least we should. When the bubble does go pop, however, it would be nice to have really solid wireless infrastructure to show for it.

— Dan Jones, Site Editor, Light Reading Mobile

AESerm 12/5/2012 | 5:36:45 PM
re: Mobile Bubble, Mo' Trouble

...cauldons bubble. It is all very frothy, this witch's brew of social networking valuations, as noted in the comments to your Oh Snap piece. (Any time someone -- optodoofuss in this case -- mentions Lucent's purchase of Chromatis, I listen up.) Another way to put it, as Thomas Hazlett does in this essay in Barron's, is that the edge is squeezing the core.

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