Anne Zelenka posted some interesting thoughts on GigaOM about the current web 2.0 environment in her Web 2.0 Manages to Sober Up post yesterday. While Steve Rubel predicts doom and gloom ala the 2000 dot-com bust, I think Anne does a great job of providing a more balanced perspective on the current environment.
I think that there are two main differences this time around.
- First, we are dealing mostly with VC investments in this round instead of public money going into insane IPOs. This means that the impact on the economy will be more limited if the bubble bursts.
- Second, most companies taking investment money have actual products. The days of funding technology ideas with no tangible output seem to be mostly (but not entirely) behind us.
In the pre-2000 days, you couldn’t build anything as quickly or inexpensively as you can now. Ajax applications come together quickly and hosting is really affordable. People are building things quickly with little money to see what works. A bunch of ideas will fail before you see the next Flickr or Digg emerge. The funding tends to go into those that have shown some success already.
While my general outlook on the industry is still positive, I don’t think that the future is all roses and kittens. Some companies are probably paying way too much while trying to catch the next big thing. Will Microsoft really get $240M worth of benefit from Facebook? Maybe, but I’m a bit skeptical.
Other Fast Wonder posts you may want to read:
- Macs, Twitter, Social Networks, and more at Defrag
- Web 2.0: What CIOs Want vs. What CIOs Have
- Jive Gets $15M in Funding from Sequoia