Sunday, November 27, 2005

To Web or to Bubble?

Depending on where you stand, the buzz around Web 2.0 seems to be getting louder and louder. In fact, at some places, it gets so loud that it makes lots of smart people wonder if it's actually Bubble 2.0:

Kevin Buton is frightened:

A lot of the recent news around Web 2.0 is starting to frighten me. There is just too much money flying around with too much hype and too little value.

Mike Rundle is worried:

Are we growing too fast too quickly? Are people throwing their money around too haphazardly, without due diligence? I don't know, but it's always a possibility.

Robin Miller is amazed by the silly business ideas:

There really are people running around with money to invest who know that little.

Speculations and hints go back as much as 6 months ago:

It is too early to say whether the flush environment heralds another tech investment bubble, but there are echoes of the dotcom boom.

David Hornik is already looking past Bust 2.0 and toward Web 3.0:

So when I hear large numbers of companies pitching themselves as excellent acquisition candidates before they've even gotten out of the gate I can't help but think to myself that we are in the heart of Bubble 2.0. Sadly, only one thing follows Bubble 2.0 and that is Bust 2.0. On the good side, there's always Web 3.0.

There is even a blog dedicated to the new bubble, and a very useful Web 2.0 Business Plan Generator.

Are we heading down toward an industry-wide embarrassment again?

Some other smart people believe that this is not the case:

John Battelle is optimistic in a recent New York Times article:

But regardless of all this déjà vu, we are not in a bubble. Instead we are witnessing the Web's second coming, and it's even got a name, "Web 2.0"

Signal vs.Noise by 37signals feels that there is no bubble, though there is certainly a lot of Babble 2.0.

Om Malik agrees:

I agree - so far it is not a bubble.

Though he goes on to warn:

But it can very quickly become one.

Scobleizer is asking:

Which gets me onto the point of this post. Is Web 2.0 a bubble?

and answering:

Not when Google's advertising revenue and profit lines look steeper than KT-22's ski slope at Squaw Valley


Not when companies like Meetro are so capital constrained that they are all living and working in one house in Palo Alto.

I believe that Brian Shin nailed it down, getting closer to the truth, in "On Web 2.0: Where are we going?":

... we've all deluded ourselves into thinking we're more important than we really are. It just looks like Web 2.0 is hitting it big because as technology bloggers, everything we see and touch is affected by it.

I am not located in The Valley. From over here, things look a bit different. Some of the most savvy VCs around here didn't even hear about that "Web 2.0" thingie until recently. The buzz is limited to a very active but still small group.

Hopefully this means that we're still in the productive part of the curve.

The Bubble may and probably will come, but not quite yet.

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