Earlier this week, Google Executive Chairman Eric Schmidt gave an over 70 minute long talk to press at the Sun Valley conference here in Idaho. Towards the end of the talk, a reporter asked the former Google CEO whether he, like many in the media world, thinks we are presently in a tech bubble and what Google’s $1.67 billion 2004 IPO at a $23 billion valuation (Google’s current valuation is 171.43 billion) means in light of today’s IPO valuations.
“Oh we were underpriced,” Schmidt joked, before remarking that he didn’t actually know whether or not we are presently in a bubble.
“On the general question of bubble, in the first place you don’t know it’s a bubble until the bubble ends, by definition. The rule I set for myself 10 years ago was that if the press calls it a bubble then I’d pay attention, and let me report that the New York Times, the Wall Street Journal and the Economist have all written articles saying that it’s a bubble.
So you have a couple choices A) The revenue growth possibility on these platforms is so large that you could get the kind of revenue acceleration that justifies the valuations. B) You have a liquidity squeeze where you don’t have enough shares, and they’re artificially high.”
When a journalist pointed out that it sounded like Schmidt was “unconvinced either way,” he said that it’s difficult to know whether the valuations are fair until a significant amount of shares hit the market, usually when employee lockups expire, typically after six months, “You won’t really know the answers until 2012,” he said.
The only clear thing at the moment, Schmidt said, was that real estate values will go up. “Young people who need houses will go into areas of scarce housing resources and there will be competition for houses and housing prices will go up. So for them it’s not a bubble it’s actually a house.”
On what effect if any the seven years of market experience have had on his perspective on Google’s IPO, Schmidt said, “Google went public at a very different time, at what people thought was an unbelievably high valuation, and let me point out that we’ve never traded below our opening price.”
Disrupt 2026: The tech ecosystem, all in one room
Your next round. Your next hire. Your next breakout opportunity. Find it at TechCrunch Disrupt 2026, where 10,000+ founders, investors, and tech leaders gather for three days of 250+ tactical sessions, powerful introductions, and market-defining innovation. Register now to save up to $400.
Save up to $300 or 30% to TechCrunch Founder Summit
1,000+ founders and investors come together at TechCrunch Founder Summit 2026 for a full day focused on growth, execution, and real-world scaling. Learn from founders and investors who have shaped the industry. Connect with peers navigating similar growth stages. Walk away with tactics you can apply immediately
Offer ends March 13.
When pressed again by a reporter for a yes or no answer, Schmidt gave the following humble reply, ” I don’t think it’s my job to call the market. It’s a mistake for me to say what the market should think … I’m not a brilliant investor. If I were a brilliant investor then maybe I’d have some status. I’m a computer scientist.” … A computer scientist with a $7 billion net worth.
