Sunday, January 7, 2007

2007 - Will it be the year of bubble 2.0?

Earlier I discussed my doubts about how long the web 2.0 bubble was gonna last. Now everyoone is catching up on it and posting about it. You can read postings about this by Michael Arrignton, Joseph etc etc.

This week saw three companies go dead (Raw Sugar, FilmLoop and Browster). Even Google got into act when they pulled the plug on Google Answers at the end of the year.

The definition on Tech Encyclopedia is very apt about the dot-com bubble - It refers to the late 1990s during which countless Internet companies were riding an enormous wave of enthusiasm that pushed their stock valuations into the stratosphere even though they never made a penny. Billions in venture capital were given to entrepreneurs with little or no experience to fund ideas that were ludicrous. It was a crazy time, and people were very excited. With all of the nonsense, many dot-coms did survive, and countless concepts and techniques were developed that continue today. One must never forget that the Internet, for all intents and purposes, is still in its infancy!

In his post, Arrington says that IPO door for new startup companies is shut and acquisition is the only viable liquidity option left in the market. He further tries to argue that there is lot of promise left in the companies by arguing about Digg which is successful because of the social community aspect. The problem still is the mushroming of such social networking sites. In hsi own words - Too much money is chasing very few good ideas ! Leave apart social networking and online video sharing, what else were the major startups of 2006 centered on?

Author - Sharad

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