Internet Boom 2.0 is here

Reuters
By Jenny Harris and Jennifer Rogers

Perhaps the most distinguishing factor from the "It's different this time" litany is that today's web frenzy is global.

In the three years that marked the height of the last boom, 1999 through 2001, the VC industry sank $96.4 billion into web start-ups, with more than 80 percent of that or nearly $78 billion in the United States alone, the Thomson Reuters data show. Of 10,755 VC deals over that run, 7,174 took place in the U.S. market.

Not so today. Of the more than $5 billion of VC money invested so far in 2011, just $1.4 billion has been deployed in U.S. start-ups. according to Thomson Reuters data. Roughly three quarters of the 403 deals have taken place overseas.

Moreover, it is the big deals that as often as not are now happening outside of the United States. Of the 25 biggest consumer Internet deals last year, 15 were non-U.S. investments, according to Quid, a Silicon Valley research start-up that tracks VC investment flows. Nearly half, 12, were Chinese.

The investors as well as the start-ups have an increasingly international flavor. Perhaps the most notable new face among today's Internet king makers is Russian billionaire Yuri Milner, CEO of DST Global. Milner has invested hundreds of millions of dollars in Facebook, Groupon and gaming site Zynga. Last month his firm invested $500 million in 360Buy.com, China's biggest business-to-consumer website.

Facebook.com
Groupon.com