January 9, 2007

Bubble 2.0 ???


I know it's cliché - everyone is talking about the 'Second' bubble here in the Valley. Well some of us are starting to question the kool-aid we've been drinking. Here is a list of reasons why I believe that the end is upon us . . . again:

(1) Web 2.0 businesses are receiving million (and billion) dollar valuations prior to generating a single-dollar in revenue.

(2) VCs and other angel investors are throwing millions at 'copy-cat' companies in hopes of striking it rich (reference all the money currently being invested in online video sites like Metacafe and Heavy.com - post YouTube's sale to Google)

(3) You can often overhear entrepreneurs and investors mumbling "1% of the market is millions" and billions . . . and trillions . . .

(4) Online advertising still has a lot of kinks. Results are inflated (in my opinion) and click fraud is still very much a factor.

(5) Many of the web's hottest new companies still give away their services for FREE, or worse, rely 100% on ad-supported business models.

(6) Google is diversifying outside of it's core business - online advertising (venturing into radio and print advertising). Does this say something about the current climate for online advertising - even though it's growing, maybe it's not quite what it's cracked up to be???

(7) Blogs; Everyone's writing them - very few people care.

(8) If you can't make a living writing and distributing your Blog or RSS Feed (two of Web 2.0's biggest creation), then why bother!!! Take it from Guy Kawasaki (former Apple evangelist - now Managing Partner for Garage Technology Ventures) - he made a little over $4,000 TOTAL in 2006 for his own highly-successful blog. Good luck! Uggghhhh.

Enjoy it while it lasts . . . Cheers

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