Bubble 2.0

The sky is falling! Every publication has to have it’s resident curmudgeon. It’s a franchise, and PC Magazine’s is held down by John Dvorak. Now he’s moaning about a dot-com bubble redux involving Web 2.0 based companies.

Each of these bubbles had a distinctive theme. For the dot-com bubble, it was e-commerce—it really should have been called the e-commerce bubble. Everything was focused on how the Internet was going to destroy all existing brick-and-mortar operations. We were told that you’d be buying sandwiches over the Internet and having them delivered the next day by FedEx. Everything was about “eyeballs” and finding ways to attract customers, whether they bought anything or not. Every article in every newspaper in the country parroted the litany as to how you’d be out of business in a year or two if you were not present on the Web in a big way. Of course, this was all crap.

The current bubble, already called Bubble 2.0 to mock the Web 2.0 moniker, is harder to pin down insofar as a primary destructive theme is concerned.

He goes on to scoff at the various concepts that are in vogue in the Web 2.0 space, all of which could come tumbling down in a crash.

• Neo-social networking
• Video mania
• User-generated content
• Mobile everything
• Ad-leveraged search
• Widgets and toolbars

An economic bubble is defined as “trade in high volumes at prices that are considerably at variance from intrinsic values”. Is that really where we are? I don’t see all that many “me too” or momentum investments in Web 2.0 companies — just a $10 million investment here or there by some VC’s. Facebook has a large valuation because they actually generate lots of advertising income (shoot, 1% of all online time is spent on Facebook), and online advertising it here to stay.

Most of the Ajax/Web 2.0 activity I see right now is existing companies retooling their online presence to take advantage of some of the new technologies and ideas.

Sorry Dvorak, no bubble here yet.

source : ajaxian.com