Dot-com bubble 2.0
By admin | Posted in Tech stuff | No Comments
After the demise and dismal display of the dot com boom in the late 90’s and subsequent meltdown in early 2000, Web 2.0 is on full course to at least equal this era in terms of venture capital and start-ups. A day doesn’t go by without hearing about another web site we must subscribe to. The list is endless and continues to grow. While some have filled voids left by MySpace (full of stupid teenagers) - although a slight fallacy as its main user base is 30-45yrs apparently - the bulk of these sites seem completely useless. Then there is the naming conventions, at first it was cool, you had sites like Flickr of which subsequently spawned a bunch of clone named “r” sites: Gamr, Browsr, Coastr, colr, Flickr, gabbr, Gtalkr, Paintr, Talkr. You get the point. Hype. That’s what Web 2.0 is. Go to TechCrunch.com and you will see the amount hype around Silicon Valley start-ups “San Fran”. Then came the masses.
Just how much has been invested this year? $3.4 billion that’s how much. Again it doesn’t seem to matter whether you make a buck, only how much VC you managed to get. Facebook is the adult social professional Web 2.0 site originally valued at $1 billion which was more recently valued at $15 billion, to which Microsoft invested in its purchase battle with Google.
So where does it leave the myriad of Web 2.0 businesses. It depends on what happens after all the furor dies down - 2, 4, 6 years later, will the spade of Web 2.0 sites survive the intial buzz? Will they be able to sustain cash-flow, and generate profits, don’t forget any business or anyone can generate a turnover. Apparently the likes of Spot Runner, LinkedIn and Facebook altogether generate less cash flow than that of one Costco store. In any bubble market, it is always surrounded by hype and speculation, seems like Web 2.0 to me. There was a saying by a top marketing professor, that “companies need to create value in order to receive value in return”…hmm
