As the New York Times highlights, the first dot com boom was marked by countless startups that generated web portals targeted at a niche audiences. The current boom is marked by startups that generate social networks targeted at niche audiences. See a common thread here? Niche audiences + targeted content = Hopes of becoming rich
If you read Techcrunch, then you know the countless number of social network startups that pop up daily and then receive some phenomenal amount of funding in hopes that they will be bought out for an astronomical amount. Over the course of the past week fuel has been poured on the fire of those with similar grandiose aspirations. With Microsoft dropping six billion dollars on aQuantive, Yahoo potentially spending one billion on Bebo, and a number of other acquisitions taking place, entrepreneurs (specifically webpreneurs) have been given glimmers of hope in their own ventures.
So how long can this last? While I’m not sure how long Google, Microsoft, and Yahoo can continue their ongoing buyout frenzy, I’m confident that it can go on for a while given the amount of cash that each of the companies have. Additionally, these three companies are not the only ones making buyouts. For the entrepreneur that has hopes of exiting via an acquisition, there are plenty of companies that are in the market for buying existing startups. As long as you can position yourself properly to be an asset to another company and can hire good financial consultants, you can significantly increase your odds of being bought out. While your odds of being acquired by one of the three internet giants are slim to none, there is still hope of acquisition by “less notable” companies.
Regardless of exit strategy, there is an interesting parallel between early web portals and the current social networks. While it may simply be an evolution, one has to wonder where the next trend is coming from. As social networks rapidly fill the void of unfulfilled niches, simply coming up with a social network is no longer a viable solution. My guess is that new strategies will come from helping people to leverage their existing social networks externally and, as the Wall Street Journal published yesterday in regards to Facebook, potentially internally as well.