• Wired, Tuesday, March 18, 2008 11:45 AM

Financial experts say recession could be very different for Web media companies this time around, because the 2001 downturn was about the dotcom bubble exploding. While the outlook for the overall economy is grim, the tech sector might not take such a direct hit this time.

That doesn't mean they'll get a pass, either. "The bust in 2000 was isolated in the dot-com and IT sector," says Brent Goldfarb, an assistant professor of management and entrepreneurship at the University of Maryland Robert H. Smith School of Business. "It didn't reverberate as strongly throughout the economy, in say, the manufacturing or service economy. This time, there's a real credit crunch and it's pervasive." That said, Goldfarb believes that Silicon Valley has some "padding."

But the "desperate" credit crisis among banks could also affect the startup market. In theory, if banks stop lending, funding for tech startups will dry up.

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