Last night I became engaged in a conversation with Aidan Henry about the web 2.0 bubble. This morning I rose to a posting about the end of Web 2.0 at the top of techmeme. So, are we really at the end of the Web 2.0 bubble? No, we are simply seeing a maturation of existing Web 2.0 ideas. While I agree with Peter Rip’s assertion that we are seeing a reduction in growth of unique Web 2.0 offerings, I don’t think it is the end. What happened?
Over the past couple years (2004 - 2006) there was rapid growth in Web 2.0 offerings. Were most of these ideas revolutionary? Not really. Each of the Web 2.0 were simply unique ways of leveraging social media. Many of the basic Web 2.0 ideas have been built and are now maturing. Revolutionary technologies take time to create, whereas many of the Web 2.0 sites were built in a short amount of time. Web 2.0 reached a peak following Google’s purchase of YouTube, the Web 2.0 conference, and Time’s person of the year.
Robert Scoble put a good quote on his site yesterday. The quote is from Hillel Cooperman, and says:
It‚Äôs amazing to me how many startups I talk to plan on making money via advertising, tell me about all the big numbers they‚Äôre going to post, and haven‚Äôt done this basic math.
How many startups can honestly expect to succeed with this business plan? Not many. We will most definitely see a reduction in the volume of successful Web 2.0 companies. While the volume of startups is not dying down, the volume of buyouts by Google, Microsoft, Yahoo, etc. as well as the volume of profitable Web 2.0 companies will slow dramatically. What we are witnessing is simply the maturation of a market. Last time around it was a boom and bust. This time, there were a large number of companies receiving venture capital. A few of them have found a successful exit strategy, many of them will not. That’s just the way the cookie crumbles.