JPMorgan's 'Twitter' fund

The banking giant will start a fund to invest in digital media companies. Is this a sign of another tech bubble?

Following Goldman Sachs' Facebook investment, JPMorgan Chase is aiming to raise $1 billion to invest in tech companies like Twitter.
(Image credit: Corbis)

JPMorgan Chase is looking to get in on the social media buzz by starting an investment fund dedicated to digital companies. The bank will reportedly collect hundreds of millions of dollars from wealthy investors, and buy into internet companies with "established business models," including a possible $200 million investment in Twitter. The creation of the fund may signal that JPMorgan is "taking a page from Goldman Sachs" in trying to get "the inside track" with these fast-growing companies. Smart investment, or another sign of an inflating tech bubble?

This time is different: Banks have learned their lesson from the last tech bubble, says David Weidner in MarketWatch. They're focusing only on internet businesses that "are profitable and growing." So while the social media landscape still has plenty of risks — remember Friendster and MySpace? — and the valuations here can "push the boundaries," at least it's a better bet than in the '90s. There won't be any "Webvans, Boo.coms, open.coms or sock puppets" among the businesses getting money.

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