We have seen the exact same scenario during the first tech bubble. The tech darling of the time, Netscape, had it's head torn off by the 800lb gorilla (Microsoft) and that marked the beginning of the end of the DotCom bubble.
This time around the flagship startup, Facebook, now has a credible threat from Google. The difference is Facebook isn't yet a publicly traded company. And I have a funny feeling the artificially inflated valuation of Facebook is just as quickly deflating right now. If Facebook's value starts declining before it goes public it could be trouble for just about every other startup that has not already gone public.
This time around the flagship startup, Facebook, now has a credible threat from Google. The difference is Facebook isn't yet a publicly traded company. And I have a funny feeling the artificially inflated valuation of Facebook is just as quickly deflating right now. If Facebook's value starts declining before it goes public it could be trouble for just about every other startup that has not already gone public.