Marc Andreessen at D9: What bubble?

RANCHO PALOS VERDES, Calif.--Marc Andreesen, partner at the Andreessen-Horowitz venture firm and developer of the original Mosaic Web browser, sees a healthy future for mobile Web apps, but not an indefinite one. "Apps make sense as long as bandwidth is limited," he said at the D9 conference here, "and that will be for a long time."

True to his roots as a browser entrepreneur, Andreessen talked about the browser market as being extremely dynamic at the moment. "500 million people have switched browsers," he said, mentioning that, in addition to Microsoft Internet Explorer, four browsers have more than 100 million users. "A market this big can support diversity," he said, mentioning that when you add in smart phones, you'll eventually get to 5 billion people using Web-capable devices.

Regarding the "gang of four" platform companies that Google Chairman Eric Schmidt enumerated (Google, Facebook, Apple, and Amazon), Andreessen agreed with Microsoft's exclusion from the list. As he points out, for the first time, considering all Internet-connected devices out there now (all PCs, tablets, and smartphones), Microsoft for the first time has dropped to less than 50 percent of operating system market share.

But he says that Microsoft could recover, as Apple did in pulling out of its 1997 doldrums. The bar for the product (Windows 8) is high, and "it looks nice," but the implication was that it's too early to tell if this operating system is enough to bring Microsoft back to prominence as an exciting consumer brand.

At the moment, Andreessen is running a venture firm with what he says is a slightly different approach: It's run by "operators" of companies. Also, Andreessen-Horowitz focuses on computer science start-ups, he says, implying that clever business models or social networks are outside his purview. Worth noting, though that Andreessen helped launch the social site Ning and is on the board at Facebook.

Are we in a bubble? "And did you cause it?" asks D's Kara Swisher. "There are a lot of people who think we're in a bubble," Andreessen said, "which makes me think we're not. I hope everybody thinks we're in a bubble, though, because it helps keep prices [for making equity investments] down." In fact, he adds, low current P/E ratios for tech companies show them as highly undervalued--the opposite of a bubble. LinkedIn is the sole outlier in this calculation "There's an equity bubble affecting exactly one stock."