Steve Hall has some interesting thoughts about the differences between the 1999 bubble and the Web 2.0 bubble right now.

"The late 1990s was a bubble on four major fronts: exit valuations, VC fundraising, VC funding and company creation (each one of which, I would argue, fueled the other). For starters, liquidity events were occurring at massive acquisition prices and IPO valuations-the list is truly astounding when you think back to some of the examples (e.g., Broadcast.com, Geocities, Akamai, etc.). And the pace and quantity of those exit events fueled the biggest increase in venture fund sizes and LP investments in history. With substantial capital to invest, competition for deals was fierce. Companies then inevitably raised too much capital from investors who were all too happy paying large valuations. This abundance of capital and high valuations drove company creation to an unprecedented level. As a VC in 1999, it was not unusual to be pitched a new business plan from "Uncle So-and-so in the construction business" or by the person at the checkout counter of the grocery store. Additionally, the bubble played out across all areas of the technology sector: infrastructure, B2C Web, e-commerce, B2B Web, communications equipment, semiconductors, etc.

Today, I believe all we have is a minor bubble in the area of Web start-up "creation," most of which is not even being fueled by VCs. In the other key areas of exits, VC fundraising, VC investing and valuations, the numbers have been heating up slightly, but I would characterize the trends as still appropriate for today's market opportunities."

The 'fueling factors' add a useful framework in my perspective to separate the different phenomenons.