As mentioned in Techcrunch today, Yahoo has acquired two new companies MyBlogLog and Bix. It seems as though there is a new acquisition just about everyday. Earlier this week Google acquired iRows, an Israeli web company, and acquired another site JotSpot last week. There is a nice list of Web 2.0 websites at Go2Web2.0, provided by Orli Yakuel and Eyal Shahar. If you scoll through the list you can find an array of companies that have already been acquired or are soon to be acquired.
To be honest, I hate using the phrase “Web 2.0” but it is hard to deny that there seems to be a massive influx of capital into new web based ventures. Will this influx disappear? I’m sure there will be an eventual slowdown of capital but to be honest, I don’t see it having any significant impact on the growth of web entrepreneurs. During the first wave of web startups most companies’ exit strategies was to go public. Now the trend is to become acquired by Google or Yahoo. Another interesting note about the new startups is that they are recieving significantly less startup capital. For example, the venture capital company YCombinator as a rule of thumb provides only $6,000 for each employee in the company (approximately 3 months worth of living expenses for a 20-something entrepreneur). There is a great article in the New York Times titled “For Start-Ups, Web Success on the Cheap”, which highlights this new trend toward lower startup capital.
What’s the moral of the story? With all the hype surrounding Web 2.0, one may expect the hype to die down soon. Unfortunately for many of the nay-sayers, the hype isn’t dying any time soon. Rather than throwing massive amounts of capital at a few interesting start-ups, venture capital companies can now diversify across a wider range of start-ups requiring significantly less capital. Bottom line, the internet industry is where it’s at; you can either hop on board, or let the train roll on past you, and trust me the train ain’t stopping any time soon.