Is 'Web 2.0' Another Bubble?

Carl Bialik from WSJ writes "Two tech VCs, Todd Dagres and David Hornik, debate whether there is a bubble in so-called Web 2.0 companies looking to cash in on a resurgent online ad market. In the WSJ.com debate, Hornik writes: 'Venture capitalists will rationally stop investing in ideas that don't bear fruit. Those that do bear fruit will gain traction and either be acquired or go public. Those are the traits of a rational market in my mind.' Dagres responds: 'I think the Web 2.0 space will have a higher mortality rate than other segments of the overall media and technology industries. There are far too many MySpace and YouTube genetically challenged clones. All but a few will fail. The winners are generally the ones that get in early and out before the bubble bursts. There are rare examples of bubble companies making it through the bust and going on to become successful and valuable companies. By the way, the combined cash flow of Spot Runner, LinkedIn and Facebook is less than that of one Costco store.'"

Comments

Is that a lot or a little?

[ScentCone]

By the way, the combined cash flow of Spot Runner, LinkedIn and Facebook is less than that of one Costco store.

I mean, have you seen a Costco on a Saturday before a ball game?

Re:Is that a lot or a little?

[seanadams.com]

If I had to guess I'd say: Average receipt: $250 Customers per hour per checkstand: 10 Active checkstands: 10 Saturday hours: 8.5 250 * 10 * 10 * 8.5 ~= $200K total saturday cash flow

Re:Is that a lot or a little?

[Salvance]

You're not too far away. The average Costco sells $115Million in merchandise per week, or approximately $2Million per non-holiday week. Costco's (and other retailers) get about 20% of their weekly sales on a Saturday, which would mean ~$400K on average.

Re:Is that a lot or a little?

[Colin Smith]

I mean, have you seen a Costco on a Saturday before a ball game? And people say Americans have no culture.

Re:Is that a lot or a little?

[Anonymous Coward]

That comment has officially jumped the snark.

Re:Is that a lot or a little?

[Anonymous Coward]

One thing that Web 2.0 sites have that Costco doesn't is Ajax!

Oh, wait a minute...

Re:Is that a lot or a little?

[silentounce]

We don't, we have immigrant culture. We take from the cultures of the people that make up our nation. I haven't seen the facts recently, but I'm fairly sure that we still have the highest immigration rate in the world. If our country was really that bad, that unfree, that terrible, would thousands of people arrive here every day looking for a better life? My ancestors came here nearly 300 years ago, and I know that means that they probably did some horrible things to the natives, but they came here looking for a better life escaping oppression and persecution in Europe. And they found it. Dissent is a form of patriotism, and that is very prevalent here. But why can't someone say something good about the States here every once in a while. We have our faults, but who doesn't? I know the above post was a joke, but, well, I just had to put in my .002 cents. Go ahead and mod this down and confirm my feelings about this forum.

Shhh...

[Anonymous Coward]

let us make our money first.

Re:Shhh...

[joeyspqr]

shhhhh ... don't tell them what we're up to

There is no such thing as Web 2.0

[phrasebook]

And the only bubble to burst is the term 'Web 2.0'. The sooner the better.

Re:There is no such thing as Web 2.0

[nate nice]

I have to mainly agree with this.

It's nothing more than a buzzword of sorts at this stage.

If it's surprising that the Internet would adopt new technologies and ideas, then whoever feels this way hasn't been in technology longer than a day.

But, is anything in Web 2.0 even defined? Just what is it? The ability to communicate without a postback? Surely it's much more than that, right?

I don't think this Web 2.0 thing has existed yet.

I believe some people have ideas about what the Internet could/can and will be, but there isn't anything other than experimental evidence out there.

That is, there isn't a "killer app" at this time.

I'd assume the idea of a Webpage first has to be killed...

Re:There is no such thing as Web 2.0

[Anonymous Coward]

Since no one can really define what "Web 2.0" is beyond "a richer experience" it is nothing more than a collection of vapore-web-apps. Investors are hungry to revisit the 90's and are tossing money at vapor.

When the steam clears we will have a handful of new services, but nothing amounting to the order of magnitude in evolution the people keep claiming that "Web 2.0" is.

Heck the "Semmantic Web" concept would be more of an evolutionary step than the reality of what "Web 2.0" really is.

I've opted to stick with a big name software co. with a plump salary, nice benefits, and stable future. It might be boring to some, but I believe statistically I am more likely to make more over the next few years there than I would at one of the Web 2.0 vapor-startups.

This isn't the 90's folks. You can never go back. Computers happened already. Software happened already. The Internet happened already. Move on!

Let's face it. The Next Big Thing will blind side most of us.

Re:There is no such thing as Web 2.0

[chromatic]

But, is anything in Web 2.0 even defined?

You could consult the guy who popularized the term: Web 2.0 Compact Definition.

Re:There is no such thing as Web 2.0

[jerryasher]

The sooner it bursts the better as I hold the trademark to Web3.0, Web4.0, Web5.0

Re:There is no such thing as Web 2.0

[hobo sapiens]

Meh, just a bunch of buzzwords and consultant-speak.

Not that some of the concepts aren't sound. For example, the internet is here. Deal with and learn to use it. Don't fight it and let the internet be what it is. Tell that to the corporations behind "Network Neutrality".

It's hard to take a source seriously, though, when stuff like this found:

Don't think of applications that reside on either client or server, but build applications that reside in the space between devices. ("Software above the level of a single device")

What does that even mean? From a development perspective, what practices enable me to write software "between" devices?

Re:There is no such thing as Web 2.0

[ultranova]

It's hard to take a source seriously, though, when stuff like this found:

Don't think of applications that reside on either client or server, but build applications that reside in the space between devices. ("Software above the level of a single device")

What does that even mean? From a development perspective, what practices enable me to write software "between" devices?

It means a combination of server and specialized client software. World of Warcraft, for example. Or, possibly, P2P programs like Freenet, BitTorrent or Gnutella; after all, a single Gnutella servent is completely worthless, it is only when you have several communicating with each other that the network becomes useful. Or even the Internet itself - the network as a whole is certainly distinct from any single server or router, and can't really be said to reside in any one of them.

Mind you, this concept is anything but new; in fact it applies to all social constructs too, and in fact to anything that has more than one part.

Re:There is no such thing as Web 2.0

[hobo sapiens]

Residing on many servers and using a network to communicate is not the same as "residing between devices". The internet is, at a low level, software running on servers. Yes, it uses the network, that's the whole point. But software running "between devices" is bogus.

Thanks for trying to answer, but bogus is bogus.

Re:There is no such thing as Web 2.0

[MacDork]

And the only bubble to burst is the term 'Web 2.0'. The sooner the better.

Here's a neat trick. Replace every reference of "Web 2.0" with "AJAX" and watch slashbots come out of the woodwork to defend the new and improved internet. You say household cleaner, they say web two ohhh. For some reason, it seems slashbots hate the marketbots.

yes no fud notfud maybe

[WilliamSChips]

Seriously, that's pretty much all you can say about this.

Federal Reserve

[P3NIS_CLEAVER]

It's a bubble because the FED is printing too much money. Eventually foreign investors will figure it out and the dollar will go down the toilet. You've been warned.

Re:Federal Reserve

[kfg]

It's a bubble because the FED is printing too much money.

It's a bubble because, as has already been pointed out, there is no Web 2.0.

It doesn't matter what nation's currency is poured into it, it's all going down the toilet hole, because a hole is all there is to go down. There is no "there" there.

KFG

A bad thing?

[Potor]

If the Web 2.0 is about user-generated content, is it a bad thing if it can't be monetized easily? I mean, I thought the point was our Web, our way?

Re:A bad thing?

[Anonymous Coward]

It's not about user-generated content. User-generated content has been here for years. As I see it, it is mostly about majority (aka "the users") deciding what's good and bad for every individual visitor. Sites like digg and wikipedia don't have much else in common, and that's the only thing I can think of that differentiates them from "old-style" user-driven websites like forums or online magazines.

Web 2 - Cash Flow?

[villy]

This was sounding reasonable until the last line...

"By the way, the combined cash flow of Spot Runner, LinkedIn and Facebook is less than that of one Costco store."

Different markets, products, etc. Not even close for comparison. IMHO.

Re:Web 2 - Cash Flow?

[glitch23]

Well if the comparison is 3 websites against 1 brick and mortar store (not chain) then I think the comparison is viable. If a single store rakes in $10k a day and 3 websites can't match that then the sites aren't making that much money. There are other sites that could rake in that much money and more (especially ones that don't rely on ads). When a site relies on ads for revenue it is a shaky way to stay afloat. A site like Newegg can make profit because they actually sell tangible products but sites like Facebook rely on advertising and that just can't create the revenue that Newegg can or even a single brick and mortar store (let alone a chain) in the same time frame.

Re:Web 2 - Cash Flow?

[Anonymous Coward]

If it is offensive then tough luck; ignore the statement since I won't change it just because of you.

This offends me. Stop turning Christmas into just another excuse to be an asshole.

High Startup Cost

[Bonker]

While I agree that we're probably about to have a minor watershed of dead web 2.0 companies, something that's often neglected is that websites are relatively inexpensive to maintain when compared to a brick and mortar location. You pay for bandwidth, new development, and storage.

If managed correctly, this is far less expensive than maintaining a 'real world' location.

If I were an investor, I wouldn't write off the Web 2.0 companies as a whole, but I would be leery of things like high salesman salaries, a large management to production employment ratio, and an absence of realistic business plans.

We still have the best of the Web 1.0 bubble with us, and they're profitable. Five, ten years from now, we'll have the best of the Web 2.0 bubble with us and will be speculating about which of the 3.0 companies are next to go.

Re:High Startup Cost

[Shelled]

"...something that's often neglected is that websites are relatively inexpensive to maintain when compared to a brick and mortar location.."

      Possibly, however maintenance isn't start-up. Many of these Web 2.0 ventures are exactly that, capital ventures, and those are typically anything but lean and mean. My employer company jumped on the 'portal' thing with Excite a few years back and dropped $70 million, some on the typical Web essentials of designer chairs and oxygen dispensers, over a period of a couple years before snapping back to reality and dissolving the lot. This from an organization with deep roots in media and content distribution too, so I can't imagine what some VC's are spending on this latest run.

Facebook and MONEEEEY

[probielantow]

Part of the issue with a site such as facebook is that their business model is not specifically oriented toward making money, it seems that even though facebook offers space for advertisers to buy, there is not cost based usage, and thus no way to net profit after their immense operating costs. (Bored college students clicking refresh waiting for messages does a number on a server). To turn a profit companies such as facebook have to offer a service that isn't available anywhere else for free, and unfortunatly for them there are plenty of clones.

In addition to offering unique services the target audience is not one that typically is willing to pay for these services, college students and high schoolers which make up a majority of facebook's userbase just don't have the disposable income to spend on an online service like this.

As to the article about Web 2.0, if companies dont come up with a unique offering (being the first to develop it) and get out before their operating costs well overrun the profits gained, they will bust and the "bubble" will pop, it is an inherently flawed system, because as any economics student would know, for a social network the most significat barrier to entry is going to be gaining a "street hype", the rest is easy.

Web 2.0 Url Please

[c0d3r]

Can someone please give me a URL to a site that is "Web 2.0". I just can't see why Web 2.0 isn't just another marketing and pc-world reading wannabe word. I'm guessing it means a fully fledged AJAX web site without page transitions that looks like a desktop app with some huge flashing eat a joes sign banner ad.

Re:Web 2.0 Url Please

[mustafap]

You just posted to one :o)

Re:Web 2.0 Url Please

[c0d3r]

Well then, whats so new and cool about Web 2.0? I've been using slashdot way before they coined the phrase.

Re:Web 2.0 Url Please

[blugu64]

Wha?

Slashdot has been around longer then this "Web 2.0" thing. How exactly is slashdot "web 2.0"?

Re:Web 2.0 Url Please

[Giometrix]

"Well then, whats so new and cool about Web 2.0? I've been using slashdot way before they coined the phrase."

Some businessmen somewhere realized that they can use "community produced content" to drive their sites rather than having to pay for writers and editors to produce content.

Our boss just gave us the "we will move toward web 2.0" speech in our "year and review" meeting. Free, up-to-date content (via forums) was the reasons he gave for moving toward "web 2.0".

That's all fine and dandy. Except that achieving a GOOD community driven site is not easy. You really need to reach a critical mass of users before your site's community will generate good, useful content that will attract more readers (and thus grow your community, and ad dollars). Would slashdot be as appealing to you if the community was only a handful of people? The news comes late, and you don't even get the whole story. The whole reason you come here is for the community's feedback to the stories. Most sites don't achieve anywhere close to this level of success, and their forums lie dormant with at most a couple of posts.

Eventually managers will realize that the promise of free "web 2.0" content is not as easy to achieve as they thought, and the pendulum will swing back toward "web 1.0."

Re:Web 2.0 Url Please

[c0d3r]

How about the title question response? Please give some Web 2.0 URLs besides slashdot (I challenge you to list 5).

Re:Web 2.0 Url Please

[nuzak]

> Please give some Web 2.0 URLs besides slashdot

Slashdot is not a "web 2.0" site. It uses virtually no javascript, let alone AJAX. Its fonts are normal sized, it uses very few gradients, and not all the corners are rounded. It's also old.

As for five: flickr, digg, del.icio.where.the.fuck.do.the.dots.go.us, 37signals.com (3 "web 2.0" apps there), technorati

Re:Web 2.0 Url Please

[The_Wilschon]

http://calendar.google.com/
http://www.flickr.com/
http://www.wikipedia.org/
http://del.icio.us/
http://docs.google.com/

You might try Tim O'Reilly's explanation, since he coined the bloody term in the first place.

Oh, and of course you heard of and used web 2.0 sites before anyone called them web 2.0. Think about it. Tim O'Reilly didn't sit around and think, hmm, let's come up with something we could call web 2.0. What would it be? And then went and made a bunch of people start implementing his ideas. It is descriptive, and the term to describe something (as happens pretty much always with history) came after that which is described. There had to be a web 2.0 before anyone could recognize it as something different from what came before and name it.

Re:Web 2.0 Url Please

[rainman_bc]

http://www.wikipedia.org/

Uhm, what about wikipedia is "Web 2.0" ?

Wikpedia uses no ajax, and uses standard http post methods, and generally is ( somewhat ) static content...

I thought Web 2.0 was supposed to be about user driven content using ajax and a load of other eye candy crap...

Re:Web 2.0 Url Please

[budgenator]

well let's see

<script src="//images.slashdot.org/prototype.js?T_2_5_0_13 9" type="text/javascript"></script>
 
<script src="//images.slashdot.org/transitions.js?T_2_5_0_ 139" type="text/javascript"></script>
<script src="//images.slashdot.org/yui/yahoo.js?T_2_5_0_13 9" type="text/javascript"></script>
<script src="//images.slashdot.org/yui/dom.js?T_2_5_0_139" type="text/javascript"></script>
<script src="//images.slashdot.org/yui/event.js?T_2_5_0_13 9" type="text/javascript"></script>
<script src="//images.slashdot.org/yui/animation.js?T_2_5_ 0_139" type="text/javascript"></script>
<script src="//images.slashdot.org/yui/dragdrop.js?T_2_5_0 _139" type="text/javascript"></script>
<script src="//images.slashdot.org/yui/connection.js?T_2_5 _0_139" type="text/javascript"></script>
<script src="//images.slashdot.org/yui/autocomplete.js?T_2 _5_0_139" type="text/javascript"></script>
<script src="//images.slashdot.org/sd_autocomplete.js?T_2_ 5_0_139" type="text/javascript"></script>
 
<script src="//images.slashdot.org/common.js?T_2_5_0_139" type="text/javascript"></script>
<script type="text/javascript">
    var reskey_static = 'ebea37dabcac84d5b89fac0c1d86703';
</script>
<sc ript type="text/javascript">
var adpage = 'article';
</script>

That looks like a pretty fair amount of javascript to me, as for the rest why not make the fonts blinking red on black background while your at it?

Re:Web 2.0 Url Please

[nuzak]

So much javascript, still no actually usable comment navigation. Aside from the tags UI, where is it? The reply textareas don't even focus by default.

Re:Web 2.0 Url Please

[The_Wilschon]

user driven content

I think you said it yourself right there. It is a wiki. Wikis are very much web 2.0. Wikipedia is web 2.0 whereas brittanica online is web 1.0. This comes straight from Tim O'Reilly (and I think he might well be considered the authoritative source here, since it is his buzzword after all), in the page I linked previously.

Re:Web 2.0 Url Please

[ccalculus]

Here's a good article that explains Web 2.0
http://www.oreillynet.com/pub/a/oreilly/tim/news/2 005/09/30/what-is-web-20.html
Coral Cache Link:
http://www.oreillynet.com.nyud.net:8090/pub/a/orei lly/tim/news/2005/09/30/what-is-web-20.html

Re:Web 2.0 Url Please

[Anonymous Coward]

Before the word Web 2.0 or Ajax has even been coined, some web applications have already used asyn communications as their primary page update mechanism.
One app that I know of was J.D. Edwards 5 running on J2EE architecture. It was a whole suite of ERP apps. The time was around 2001. Unfortunately the company was bought by a bigger fish and their product was kind of dead. But I beleive there are quite a few company still running their apps.

Re:Web 2.0 Url Please

[ralphdaugherty]

Would slashdot be as appealing to you if the community was only a handful of people, the news comes late, and you don't even get the whole story.

      Well, one out of three isn't bad.

  rd

Re:Web 2.0 Url Please

[ralphdaugherty]

I thought Web 2.0 was supposed to be about user driven content using ajax and a load of other eye candy crap...

      Two different aspects being referred to. The user driven content mostly doesn't even use AJAX. A more interactive browser experience (AJAX) from site driven content was supposed to be the other.

      At least as far as popular technical buzzword press goes.

  rd

NO

[imsabbel]

because that was JUST the argument in the first bubble: "well, they only burn money without revenue. But its a totally different market, so lets boost them further!!!".

We are again reaching the point where decorated turds get market capitalisations in the 100s of millions.
And still, they simply arent worth it.

Re:NO

[Breakfast Pants]

Well considering that the cash flow of an operation like facebook winds up near 100% profit (servers, bandwidth, few employees), and the profit in the cash flow of a costco store doesn't come close (building rent, they items they are selling aren't free, returns, service, etc.) it doesn't seem very fair.

Re:NO

[P3NIS_CLEAVER]

Investors care about growth. How many more idiots will sign up for facebook? Hasn't it already peaked?

Re:NO

[edflyerssn007]

Every year more freshman go to college, therefore every year between the months of August and November when all the freshman get their college e-mails, they will join with facebook. And it is also open to the general public, so even more people there. It will continue to grow.

-Ed

Re:NO

[julesh]

Investors care about growth.

Investors care about returns. Growth is only one way for that to happen. A steady stream of large dividends from fairly constant profits will keep them happy too.

tagging beta: yes

[mandelbr0t]

If you have to ask...

Web 2.0 looks to me to be the same as the .COM bubble. There's a bunch of hyped technologies, a bunch of consulting companies monopolizing the HR, a bunch of VC firms with slush funds to melt, and very few people that actually understand any of it. I don't see any changes to marketing or project hype; a presentation to my 2004 technical college class sounded like it was written by c.2000 .COM gurus. All in all, it seems to me that the Web 2.0 bubble is based on the same psychology as .COM: "Anybody who understands the technology is too dumb to understand the business".

Let me try and expound on that last statement a bit; it is based on personal experience, not some knee-jerk reaction. I got hired as a consultant about 9 months before the .COM bubble burst. I knew a crap-load about CGI and server-side scripting and HTML and Unix and Apache and so on. They seemed to pay me well, until I took into account the down-time between contracts. Moving out of the IT industry didn't seem to be an option as long as I was in the recruiters' databases. On the bright side, I'm not so dumb about the business any more. The business is effectively this: "I don't know how to implement X, but I know how to bully some techie dweeb into implementing it for me for a tenth of what it's worth."

All of the latest marketing and hype for Web 2.0 seems to have this same negative attitude about tech. dweebs. Geeks become slaves, IPOs go through the roof (but you can't afford the shares on a geek's salary) and companies sell vapourware. Projects go over budget, get extended, fire their entire team, hire more expensive consultants and extended again. The last contract I was at was still suffering from this crap. The product had been in development for 4 years by 2-3 people full-time, and I could still write a better version in 6 months by myself.

If there was an obvious decline in corporate corruption, I'd say that Web 2.0 might not be such a bubble. AJAX and other "dynamic" approaches do offer a better end-user experience. Broadband content is commonplace. Blogging is popular. But the overall negatives vastly outweigh the positives. We need to stop thinking about technology as a short-term investment strategy, and consider the overall societal impact. I'm not in it for the IPOs myself; I hope those that are start to listen to the geeks. "Don't make me angry; you wouldn't like me when I'm angry" :P

mandelbr0t

Re:tagging beta: yes

[moore.dustin]

All of the latest marketing and hype for Web 2.0 seems to have this same negative attitude about tech. dweebs. Geeks become slaves, IPOs go through the roof (but you can't afford the shares on a geek's salary) and companies sell vapourware. Projects go over budget, get extended, fire their entire team, hire more expensive consultants and extended again. Huh? What? I mean, for the most part, what you just said was similar about the Web 2.0 bubble and the .com bubble is actually.... well it is what is different, not similar.

Geeks become slaves? Well maybe here and there, but the Open Source movement is happening right along side the Web 2.0 movement.

IPO's through the roof? Nope, not true. This bubble is more about being bought out than going public. Acutally, almost all the new about anything is a buyout, not a IPO.

Companies selling vaporware? Not really, most of this movement is based on generating content for people to read and for you to sell ads on. What is vapor about content?

Projects go over budget, get extended, fire their entire team, hire more expensive consultants and extended again? Examples? This sounds like a company looking to embrace Open Source, not some Web 2.0 thing.

Now the Web 2.0 bubble is still lurking, but it is not here just yet. Some of the other difference with this bubble and the last are that the Internet is being evolved by this one, instead of just utilized and implemented, like the last. IPO's are not causing new jobs to be created with low job security. So the chances of the industry workers suffering like after the .com bust is much less likely.

Re:tagging beta: yes

[mandelbr0t]

Projects go over budget, get extended, fire their entire team, hire more expensive consultants and extended again? Examples? This sounds like a company looking to embrace Open Source, not some Web 2.0 thing. Hmmm. Actually, it was a company that embraced Microsoft. And they did that because they got tired of Sun. I'll admit that there's some truth to many of the points you brought up, but I stand by my corruption argument. And, in a strange way, you've proven the "geeks don't know business" argument.

Try being a little cynical for a few minutes, and stay with me. The issue in this particular case was not how quickly the project could be done; in fact, there didn't appear to be much interest in creating a working project at all. The reason for this is simple: a project manager 4 years ago made a prediction about cost and timeline. There is also no possible way he could be wrong; the company committed to the cost and timeline when the prediction was made. And the project manager's MBA trumps my experience. It also turns out that this was a security project; cutting corners on such a project would be detrimental to the company. Again, we're not talking technical details. The actual security of the project is secondary to the appearance of security. The possible timeline of the project is secondary to what the project manager determines the timeline actually is.

It turns out that geeks can get rich in this scenario too. IMO, you'd have to be unethical to play along though. Effectively, you are being given money to delay the project or come up with reasons why it's infeasible in its current form. Personally, I prefer being given money to make technology work instead of making up stories. Of course, after a project has been managed this way for 4 years, you don't have to try very hard to find reasons that it's infeasible in it's current form. Unfortunately, only the project manager gets to decide when the project actually gets axed. Development on such a project is miserable; you get punished for writing good code. Maybe some people can put up with that, but I can't.

mandelbr0t

Re:tagging beta: yes

[inKubus]

If everyone is doing something and making money, it's a bubble--if it has these characteristics:

1. It serves no apparent useful purpose
2. You don't see easily how anyone can make money doing it
3. Everyone you know has made so much money doing it

Anything that inflates to quickly will POP. The problem is that ANYTHING that makes money these days is pounced upon by get rich quick assholes who drive up prices and kill the whole thing. There's no such thing as an unsaturated market unless you innovate or invent a new market. Basically, if you aren't changing the world and making a lot of money, it's a bubble.

Re:tagging beta: yes

[moore.dustin]

And, in a strange way, you've proven the "geeks don't know business" argument. Well I own my own business and ran a 100% internet based retail site for well over a year. To say anyone does not "know business" is going to be right. You are speaking of a different part of business, one in which you are working for the man. I know what part of business I do know, but to say that me, as a geek, does not know business in general is sort of insulting.

Re:tagging beta: yes

[Anonymous Coward]

Looks to me like you're trying to extrapolate on your obviously negative experiences, and assume that they are true of the world at large. Geeks become slaves? I'm sorry, but you have to be particularly unsavvy to find yourself in that situation. (Or outright incompetant - you wouldn't believe how many people apply for jobs as software engineers but cannot write a function to average an array of integers)

I live in greater Boston, and have worked several jobs in the last few years and none of them have resembled the experiences that you describe. Compared with pretty much any other career, we have to deal with remarkably little crap, and Software Engineers consistently rank high for career satisfaction (though I won't deny that things got hard after the .COM bust). Now the problem is finding good people; actually where I work get fat bonuses for recruiting people.

You need to start looking around a bit more. Last time I changed jobs, when I put my resume on Monster, I got innundated by recruiters trying to hustle me; the bust is over. You don't have to put up with shit bosses and catty work environments. Also, there are not many IPOs nowadays; most Web 2.0 companies are trying to make money in their own right. The whole IPO run thing is so passe.

Re:tagging beta: yes

[cakkafracle]

its only insulting if your "100% internet based retail site for well over a year" is/was successful of course, if you say it is/was porn, it's a given...

Irrelevant

[denoir]

Ultimately a bubble or not is irrelevant. Today investments in Internet technology are considerably higher than they were during the peak of the IT boom. A boom-bust cycle is perfectly normal for the early stages of just about any technology. Short term expectations are usually inflated but the long term impact is consistently underestimated.

Information technology is developed at an exponential pace - and we are nowhere near a saturation.

Re:Irrelevant

[Citizen of Earth]

“Wall Street is always the last one to the party, drinks the most, then has a huge hangover.” — peter penguin

Re:Irrelevant

[Anonymous Coward]

linked

Was There Some Doubt?

[Anonymous Coward]

don't think so...
 
...we all know what hapens when marketers find an interesting field.

Just ads!?#@!

[recharged95]

"surgent online ad market"

Really, if all web2.0 is about ad supported services, then we are truly heading for a bust. Ads are like having prostitiution support your schools. Also, features such as "more collaboration" is great, but it not a revolutionary thing.

Great, another fine use of all those MBA degrees on Wall Street.

Re:Just ads!?#@!

[vertinox]

Ads are like having prostitiution support your schools.

So if I use Ad block extension, it means I'm having sex with prostitutes for free?

Re:Just ads!?#@!

[Grant_Watson]

Ads are like having prostitiution support your schools.

Am I the only one who missed the connection here?

Re:Just ads!?#@!

[AuMatar]

On behalf of prostitutes, I'm insulted. Prostitutes perform a service in exchange for money. Its a fair deal for all involved. Advertisers are slimeballs who steal your time with a web of lies and half truths, attempting to con you out of your money. I'd rather have prostitution support my schools than advertisements.

Re:Just ads!?#@!

[RoChoy]

Prostitution and Advertising have both withstood the test of time. Generating money from advertising is bad how? *cough* Google *cough*

Re:Just ads!?#@!

[Anonymous Coward]

Generating money from advertising is bad how?

You've obviously never been subjected to the Chevy Truck/John Mellencamp "This Is Our Country" ad campaign. You lucky motherfucker.

Re:Just ads!?#@!

[budgenator]

you mean like since our schools are all ready supported by the second oldest profession, gambling, we should add the world's oldest prostitution to the mix?

Re:Just ads!?#@!

[Junta]

One, that analogy made zero sense.

Two, ad supported media businesses do have precedent, it's called broadcast TV.

Re:Just ads!?#@!

[AuMatar]

Lieing (99.99999999999% of all advertising) is unethical. Forcing me to view/listen to your ads is unethical. Product placement is unethical. There is nothing good about advertising, the entire field ought to be outlawed.

Re:Just ads!?#@!

[RoChoy]

So I guess you never use Google? or any other website that depends on advertising to offer you a free service that's valuable to you? Good luck with that.

Re:Just ads!?#@!

[Rakarra]

Lieing (99.99999999999% of all advertising)

Oh come on man, your hyperbole does not serve the arguement well. I'm no fan of advertising, but no one pays attention to arguements like that.

Re:Just ads!?#@!

[AuMatar]

Hyperbole? I'm probably understimating. AN advertisers job is to lie and trick you into buying their stuff.

Re:Just ads!?#@!

[Rakarra]

An advertiser's job is to convince you to buy his stuff. Lying and tricking can be involved a good amount of the time but often "department store store-wide sale 30% off this Saturday" and "Free 19" LCD monitor with the purchase of so-and-so computer while supplies last" aren't lies.

Re:Just ads!?#@!

[Abcd1234]

Really, if all web2.0 is about ad supported services, then we are truly heading for a bust

You *do* realize that's what TV is all about, right?

Re:Just ads!?#@!

[ralphdaugherty]

So if I use Ad block extension, it means I'm having sex with prostitutes for free?

      No, the prostitutes would be blocked, so you'd be having sex with... hmmmm

      But it'd be free.

  rd

Re:Just ads!?#@!

[ralphdaugherty]

Ads are like having prostitiution support your schools.

Am I the only one who missed the connection here?

      Yes, prostitiution is tit tuition from pros, but must be at least 2000 feet from the nearest school.

  rd

If you use NoScript plug-in...

[Anonymous Coward]

...you know the answer.

Pretty much

[TodMinuit]

I'm reminded of a Slashdot comment from a ways back:

The new dot-com business are like donkeys chasing a carrot on a stick. They just keep on walking, never getting any closer to the carrot, but expending a lot of energy (money). They need some company to come along and give them the carrot.

I call this "The Paul Graham Business Plan".

Hopefully

[neoform]

*crosses fingers*

What is this web 2.0?

[Anonymous Coward]

Seriously .. nobody really knows what "web 2.0" is. In my head, it basically consists of:

  - google / gmail
  - wikipedia
  - blogs
  - youtube
  - maps.google.com

Linkedin is just a regular dynamic site with various content. Nothing new there.
The same goes for most of the rest ..

The important thing is the _content_ of the site. If it's very informational - great! If it inspires debates loads of people find interesting - great! If it makes people more productive (heh.. never seen a productivity increasing webapp in my life!) - great! If it brings joy and fun - great (but don't expect many of those to flourish.. )

Anything that doesn't provide one of :
  - information
  - entertainment
  - productivity
  - debates .. then it's doomed, in my book :P

Re:What is this web 2.0?

[KillerCow]

Seriously .. nobody really knows what "web 2.0" is. In my head, it basically consists of:

    - google / gmail
    - wikipedia
    - blogs
    - youtube
    - maps.google.com

A web 2.0 site is one where the users provide the content.

Google is not [it's just a search engine].
Gmail is arguable, but would likely fall into the "not" category.
Wiki is.
Blogs are not (unless the main draw is the comments, ala Slashdot), but blogging sites (blogger, livejournal) are.
YouTube definately is.
Maps is not (modulo the Maps API).

Other examples: Ebay, discussion forums, dating sites, social networking sites.

Re:What is this web 2.0?

[Anonymous Coward]

Google is the seminal user-created site. PageRank relies on the links created by *everyone on the web* to make it's search results better that any other.

Re:What is this web 2.0?

[ralphdaugherty]

Maps is not (modulo the Maps API).

      This is just ridiculous. Google Maps was the original buzz on Web 2.0. The kiddie content stuff also (Myspace / Youtube), but Google Maps was the epitome of the future in Web 2.0 press.

  rd

I hope Web 2.0 is another bubble

[brokeninside]

In 1997-1998 you could land a decent tech job just by knowing how to edit a file with vi. The job market pendulum has swung back to the side favoring employers since 2001 or so with hundreds of applications being thown at every single position.

Re:I hope Web 2.0 is another bubble

[Citizen of Earth]

The job market pendulum has swung back to the side favoring employers since 2001 or so with hundreds of applications being thown at every single position.

Your theory doesn't seem to account for the recent record-low levels of unemployment. High-skill tech jobs have always gone unfilled.

Re:I hope Web 2.0 is another bubble

[Euler]

Low unemployment does not mean high numbers of people employed. People move to other geographic areas, other careers, retire early, or stop looking for work. I live in a city that has 'improving' unemployment numbers. But that is because tens of thousands of people have left the area. Actual employment numbers have not increased.

High-skill jobs do go unfilled because the requirements to fill the job are unrealistic. i.e. someone with 10 years experience in .Net with a master's degree who will work for under $40k per year. If the job really needed to be filled, the market would make it happen by paying the right price.

Re:I hope Web 2.0 is another bubble

[Tiro]

Good luck finding someone with ten years experience with .Net

Re:I hope Web 2.0 is another bubble

[Corporate Troll]

I think that was his whole point. I remember seeing job postings for Java programmers with 10 years experience... in 1998... Java 1.0 came out in 1995, if I recall correctly.

Re:I hope Web 2.0 is another bubble

[Anonymous Coward]

Low unemployment does not mean high numbers of people employed. People move to other geographic areas, other careers, retire early, or stop looking for work. I live in a city that has 'improving' unemployment numbers. But that is because tens of thousands of people have left the area. Actual employment numbers have not increased.

Wow.. you don't like the job prospects there? Well then MOVE. Welcome to the real world, Skippy. I've had to move three times in the last decade and I'm pretty damned lucky.

High-skill jobs do go unfilled because the requirements to fill the job are unrealistic. i.e. someone with 10 years experience in .Net with a master's degree who will work for under $40k per year. If the job really needed to be filled, the market would make it happen by paying the right price.

I don't know where you are, but that's not the norm no matter how hard you click your heels together and think it is. Do you have more than an anecdote to support this? I know here in Ohio (a low cost of living state no less) people aren't rolling in the bucks, but a BS with a couple of years of .Net will generally get you 50-70k, unless of course you're an idiot who is averse to regular haircuts and business casual (yes, it DOES matter). Hell, I've talked to some server hardware techs (i.e. not Joe Bob's PeeCee Repair shop wannabees) and even they're getting 45k on average.

Re:I hope Web 2.0 is another bubble

[ralphdaugherty]

High-skill jobs do go unfilled because the requirements to fill the job are unrealistic. i.e. someone with 10 years experience in .Net with a master's degree who will work for under $40k per year. If the job really needed to be filled, the market would make it happen by paying the right price.

      Although I agree with everything else you said, not this statement which is frequently made. It implies that there are people who can fill these technical jobs making more in a non-tech career and $40k isn't worth their trouble for the tech job.

      Excluding those people who can fill the job but are making more elsewhere, because if they leave, their previous position has to be refilled, there is very little out there for a tech career person where even $40k can be made doing something else.

      In other words, if the pay were raised to $80k I personally don't think there is this reserve of people who could fill the job making greater than $40k but less than $80k who would say, oh, ok, now it's worth my trouble to quit real estate or whatever.

      I think the requirements and pay are based on outsourcing specs, and the employer has no expectation whatsoever of filling it with an American without outbidding someone else for an employee, so they'd prefer cheap in India.

      If others real world experiences are different than this, I'll change my opinion on this.

  rd

Re:I hope Web 2.0 is another bubble

[Euler]

yeah, exactly.

So will there be a Web 3.0?

[TheWoozle]

Or will we call it Web2008? Maybe WebXP? How about WebDuo2?

=P

Re:So will there be a Web 3.0?

[Frosty Piss]

All of those domains have been taken by squatters...

Re:So will there be a Web 3.0?

[joe_bruin]

It shall be called Web.Net

Re:So will there be a Web 3.0?

[Jose]

it shall be dubbed Web for Workgroups.

Re:So will there be a Web 3.0?

[Anonymous Coward]

Afterwards it will be Google 3.0 and MSN 360. Google will be bashed for the rootkit planted in Firefox and the winner will be the underdog Yii from Yahoo.

Re:So will there be a Web 3.0?

[Anonymous Coward]

You fail. You do not win an internets.

I mean, how could you pass up "WebNT"?

Web 2.0 is almost evil.

[Anonymous Coward]

Everything I see about Web 2.0, if we take the generic definition of "user generated content", and then slapping/stripping marketing data can only mean Web 2.0 is (almost) evil.

Slashdot is "Web 2.0" if we go that route. I don't think Slashdot is evil, but I don't trust them (hence the AC status).

Every Web 2.0 site I see asks people to upload/contribute content. This is good. To run the service they need money, which they make via advertisements and/or marketing data. This is okay/bad. I see SOME sites starting up ONLY to generate this type of cashflow, and thus, they are (almost) evil.

I do use Youtube, Myspace, Google, Slashdot but I don't expect them to be "around" if/when I NEED them. OTOH, I do expect services I pay for TO be there; the Post, the Bank, the Grocery Store.

Bubble or not, the Web was intended to be read/write. It has been that way all the time: provided you had permission.

All the legal problems/headaches are related to people being able to "write" to the web in an unmoderated fashion.

Lacking knowledge of economics?

[Anonymous Coward]

Thanks for posting your ignorance on slashdot, where you can get rewarded in mod points.

As long as the USA provides services foreign countries need, the dollar will be strong. The dollar is weak because foreign countries which lack basic economic knowledge have not opened up to our products. And until everyone in the world has everything they need (a car, house, fridge etc) there is plenty of goods remaining to be provided. Right now, the world lacks the production capacity to make enough goods for everyone. It takes millions more workers than the US has to even supply it's own economy with all the goods and services people want (we now today have more cars and fridges per capita than ever before). Add to that computers, new drugs, and entertainment.

We have only a 5% unemployment rate, and that's with more women in the workforce than ever before. The number of hours worked to be able to afford a fridge has reduced a lot since the 1950's. Same with cars.

Right now, lack of cheap energy is holding the world back. The USA has the knowledge and workers to help countries that need cheap energy get it. For example, we could be building power plants in China. Disalination systems for irrigation in the middle east and african desert regions. automated harvest systems Etc. In exchange, we'll get cheap manufactured goods from there. If we do things right and advance automation capability (we'll need this because only poorer people/countries tend to have enough kids/workers to replace themselves), someday two hundred years from now people in America and worldwide will only have to work a few hours a day to be able to afford a decent lifestyle. And we'll be arguing how to increase the global population without forced child bearing.

Re:Lacking knowledge of economics?

[PenGun]

You are doomed. The rest of the world is quite capable of producing it's own infrastucture. The USA is losing to the rest of the world that really does not like it much anymore.

  The Chinese own your ass and if they ever call their paper you are toast. The dollar is dropping against almost every currency there is and your present boom is gonna tank real soon over your insane real estate ponzi game.

  Have a nice day.

Re:Lacking knowledge of economics?

[Anonymous Coward]

"Right now, lack of cheap energy is holding the world back. "

Initially, after the industrial revolutiion, wealth was created by the hard work of the masses for the wealthy few. after the WW2 things began to change : the masses (in the first world) began to become wealthy, on the backs of the third world, and on the raw-materials (oil, copper, iron, ...) they provided(READ : we robbed/pillaged them off). Now the tables are beginning to turn and we will return to the state before the WW2, and in my opinion, in the US this is allready happening : mother and father working and barely affording a middle-class lifestyle.

Re:Lacking knowledge of economics?

[Anonymous Coward]

If the Chinese ever "call in our paper" we would experience a recession while their country went down in flames.

Re:Lacking knowledge of economics?

[xENoLocO]

I don't mean to post off-topic and what not, but I couldn't help but notice your javascript mouseover menu on your (I think that's a) website.

Do you really have relevancy to speak on this subject?

Re:Lacking knowledge of economics?

[P3NIS_CLEAVER]

Well thats the gaff isn't it? Who is going to blink first? When basically took on 1 billion workers in the us with open trade in the 90s where will this lead.....

Re:Lacking knowledge of economics?

[Anonymous Coward]

> The Chinese own your ass and if they ever call their paper you are toast.

And so is China. That's the thing about buying a currency -- you want it to be worth something.

The same old horseshit got trotted out when it was Japan. There's problems on the horizon, but nothing that your grade-school intellect is able to fathom.

Re:Lacking knowledge of economics?

[Colin Smith]

If the Chinese ever "call in our paper" we would experience a recession while their country went down in flames. That might have been true were the dollar the only reserve currency... By diversifying into euros and others, the currencies in question will increase in value making imports cheaper for those countries. Imports from for example china.

e.g.
http://www.ft.com/cms/s/0ca841d4-c3c7-11da-bc52-00 00779e2340.html

Re:Lacking knowledge of economics?

[PenGun]

It's a fossil. It was going to be replaced by a complient CSS based site but I lost interest in web crap. Video is more interesting these days.

  Fill yer arrogant boots poodle ...

Re:Lacking knowledge of economics?

[PenGun]

Son they did not do this to get rich. It's a form of warfare, the Decider against the current government of a 6000 year old culture.

Re:Lacking knowledge of economics?

[PenGun]

Had a look at your website ... heh. Ah well.

  I just turned 60 and the old people deal got my attention.

  You young folks are so lame these days. I mean I keep wieghts to lift, (curl 45# bench 125# squat 150#) nice shoes to run in (couple miles every other day) and my Slamd64 11-current to play with my satellite boosting HD home theatre deal. Those HD documentrys are filling up my 0.8 terrabyte hard drive array pretty quick now. Looks like HD DRM has already failed.

  Again, have a nice day ...

Re:Lacking knowledge of economics?

[b.burl]

As long as the USA provides services foreign countries need, the dollar will be strong.

need?...Which products would that be? Windows, Hollywood movies, military arms? What exactly does they US provide that other countries can't?

The dollar is weak because foreign countries which lack basic economic knowledge have not opened up to our products.

Examples? Maybe these countries do have a grasp of economics and realize the only way to build an infrastructure is through tarriffs. There is no way a primitive economy can compete with a mature one. Name one country that transitioned to the first world without tarrifs. Aside from that, this comment has the tone of 'if they dont open up, will do it for them, and it'll be for their own good.'

And until everyone in the world has everything they need (a car, house, fridge etc) there is plenty of goods remaining to be provided. Right now, the world lacks the production capacity to make enough goods for everyone. It takes millions more workers than the US has to even supply it's own economy with all the goods and services people want (we now today have more cars and fridges per capita than ever before). Add to that computers, new drugs, and entertainment.

Like it or not, there is a limit to the planet's resources. As the competition for finite resources becomes more deadly, debtor countries with negative balance of payments are going to suffer. The US does not have a god given right to 25% of the world's resources.

We have only a 5% unemployment rate, and that's with more women in the workforce than ever before. The number of hours worked to be able to afford a fridge has reduced a lot since the 1950's. Same with cars.

True, but then add in the massive increases in the costs of education, healthcare, rent/mortages and the decline in real wages as well as the massive decrease in wages as a %tage of GDP. And with the doom and gloom surrounding the fiscal gap, well I'd be worried if I was a middle class american.

Right now, lack of cheap energy is holding the world back. The USA has the knowledge and workers to help countries that need cheap energy get it. For example, we could be building power plants in China.

The chinese can build their own facilities. Haven't you heard of the Yangtze dam? Or the fact they bring 1 new coal plant into the grid every 2 weeks.

Disalination systems for irrigation in the middle east and african desert regions.

Does the US dominate the massive desalination market?

automated harvest systems Etc. In exchange, we'll get cheap manufactured goods from there. If we do things right and advance automation capability (we'll need this because only poorer people/countries tend to have enough kids/workers to replace themselves), someday two hundred years from now people in America and worldwide will only have to work a few hours a day to be able to afford a decent lifestyle. And we'll be arguing how to increase the global population without forced child bearing.

Your strangely deluded. The trend, despite massive gains in worker productivity, is increasing working hours and decreasing real wages.

Wait is your post a joke? Ok, you got me.

Clones or no clones, it's the insight into people

[i_ate_god]

Advertisers, marketers, they want to adjust society to create market friendly conditions for their products. This doesn't have a high success rate.

This "Web 2.0" thing, is basically the advent of millions of people expressing their lives and opinions openly and freely and now marketers and advertisers have a gauge on society and where it's headed before it even gets there. This isn't about MARKET trends, this is about SOCIETAL trends and right now the suits of the world have trillions of bytes of information at their disposal to make decisions on what the new product will be and how it will be sold to the masses.

This is DEFINITELY not a bubble that will burst at all. Welcome to the new way of doing business. This will be both great and horrible for the masses. Because of society exposing itself like never before, "underground" cultures are going to be exploited far more quickly. Originality will be harder than ever to achieve. At the same time, we'll probably start seeing less focus-less advertising that is just trying to get anyone anywhere to buy a product they don't want or need.

I welcome any sensible debate on this...

To point out the person pointing out the obvious.

[nick_davison]

'I think the Web 2.0 space will have a higher mortality rate than other segments of the overall media and technology industries.'

Wait a moment, the characteristics of a fast moving segment of the business world is that it moves faster than the other segments?

Wow. I wish I could be an analyst.

My prediction for 2007: Thirsty people will continue to buy water.

Send text 'IWantToRuleFaceBook' to number *1234?

[Anonymous Coward]

College students or not, everybody has a mobile phone. Just send Premium Rate SMS, and instantly you get better experience - auto-refresh maybe? This is the way to monetize huge numbers of users - offering something better yet optional. Considering the ease of sending SMS, plenty of users go for it.

I, Dagres

[Anonymous Coward]

but I Dagres...

web 2.0

[dheera]

there is no "bubble" in web 2.0.

the point of websites such as facebook, youtube, digg, etc. are not to stay aronud forever. instead, the point is to take advantage of technologies and trends today (broadband, social networking on the web, etc.) to create something interesting for people.

sure, ad revenue off a website is nothing compared to a costco store. but for paying a few hundred bucks to get your site colocated or hosted and then running ads, you can sit back, relax in a chair, and watch money pour into your bank for doing essentially nothing -- IF you made a hit site, that is. And if you didn't, oh well, small investment, a few bucks of hosting. big deal. and if you really made a hit, perhaps someone will buy you out and give you even more money and start taking care of your lawsuits.

i think the real characteristic of web 2.0 sites is low initial risk, and lots of money if you do it well. and then sooner or later your website gets superseded by something else, just like google took over altavista, just like firefox and ie took over ncsa mosaic, and so on. when that happens, you just move on with life, happy that you did something cool for a few years, and happy that you can retire with enough money already.

it's not about keeping the bubble forever. it's all about making a really pretty bubble for as long as it lasts, and then retiring.

Re:web 2.0

[Anonymous Coward]

(mod parent up)

This is a good comment. There are certainly a lot of bubble-dynamics in "web 2.0" which are similar to the dot-com boom, but there are also many differences. Not the least of which is that many of the web 2.0 startups these days are much, much leaner than many of the dot-com startups. You don't see as many "get millions of VC dollars, get big fast, profit!?" companies with web 2.0, and this will affect the "bubble bursting" dynamics enormously.

Re:web 2.0

[Anonymous Coward]

Running Facebook probably costs more than a "few bucks for hosting." From a random sampling of my usage of thefacebook (old skool naming ftw), I use about 100 MB of bandwidth/month from the amount of photos/data that need to be streamed to my computer stalking people. (each image is what... 50 KB? seems about right). Now compare that usage to how much money I give them? I've clicked on 0 ads and donated 0 money.

Sure, other companies may still pay facebook for 'passive advertising' but I can confidently say I've purchased nothing this month as a result of using the facebook, so eventually those companies will realize their money is being wasted (if I represent the typical college student).

In the end, multiply that net loss by the millions of students using the facebook and you've got a problem that digs deeper than a few bucks.

Re:web 2.0

[dheera]

right, but in the initial stages you never put down the money for that kind of datacenter. in the first stages, facebook was probably run out of some kid's college dorm internet connection with a junked old PC, and as it got popular and made revenue in little bits, they upgraded and eventually to the expensive hosting needed.

still, i bet that the hosting costs of facebook are a small fraction of the money it makes in advertising.

point is, you don't have to put down the money for hosting until you already start getting some cash (from advertising) for your popularity. at that point you pay more for hosting, you get more popular, repeat, repeat, repeat. and if you don't get popular, oh well, all you wasted was your programming time and a few initial bucks to try an experiment. and perhaps not even that, if you're a college student running your web 2.0 experiment off a junked PC.

Re:web 2.0

[Prof.Phreak]

Setting up a profitable site isn't "a few hundred bucks", and it's not a ``small'' investment unless you're a very small shop and working on your own (or with your friends) for ``free'' (on your own time).

As soon as you start paying folks for work, it gets really expensive (a few good developers, consultants, sales folks, rent(!), and you're looking at a multimillion dollar operation---unless of course they work for peanuts, which most good developers don't).

Also, the idea of `setting up something', and then sitting and relaxing (supposedly watching your account grow) is ...misguided. No business has managed to do that---no matter the domain (unless of course you're `the founder' of a successful corp, and have your minions do your bidding---but even then, you'll likely to fail quickly unless you keep on running/struggling, etc.).

So "web2.0" startups have: high risk of failure, no sustainable profits (you can't have -everyone- living off advertising---someone needs to be -paying- advertisers), and incredible expense that goes along with having an IT corp that employs lots of qualified folks. Your chances of success... are slim: venture capitalists are pretty optimistic folk, I gather---or are in it for the short term, until they sell their venture to the next, more optimistic, gambler/investor.

boredom

[Darth Cider]

If Web 2.0 means sites that aggregate info that isn't boring, how can that fail? If it refers to sites like Facebook, where people can connect with real people, how can that fail, unless everyone is boring to everyone else? People go out of their way to find what interests them, but not TOO far out of their way. Minimizing the work of finding what is interesting--is that Web 2.0? Speeding up page-loads? Speeding up connect times to what is interesting? I don't see anything really new about the info available on the net. The only difference is how it is easier to find what one wants.

Re:boredom

[Ernesto Alvarez]

If Web 2.0 means sites that aggregate info that isn't boring, how can that fail? If it refers to sites like Facebook, where people can connect with real people.....

It's not the "connection" part that will fail, it's the economic part.
Sure, you might make the best site ever, holding the most interesting collection of data of the whole universe. That does not mean that you will make enough money by selling ads. Also note that ads get in the way of when you intend to have faster loading times and going straight to the interesting data.

Making a great site and earning cash from the sale of ads is exactly the same plan as used during the .com bust. The only thing that changed is the technology used (and barely, web 2.0 are either web sites or web services (remote procedure calls over http, RPC was invented decades ago and http is just for avoiding firewalls)). There's nothing really new.

I really don't care about that web 2.0 thing. If it interests me, I go see that web site (since it can display on my unaltered web browser, it must be a web site). If it's shit, I'll never even notice it. And all that while using adblock in what I call "carpet bombing mode". Go try to get me to see some ads if you can!

Remember: it's still a bust if the company goes bankrupt.

Old news...

[UOZaphod]

There's already several items regarding this showing up in my mashup, and I wrote about it in my blog, and I talked about it extensively in my podcast, and I updated the wiki. ...sorry, I can't go on. If I spew any more stupid buzzwords I won't be able to tell if I'm puking or not.

Its all about the CPM

[coldtone]

For some sites this is a bubble.

TechCrunch makes $60,000 a month for just 2.5 Million page views. Thats $24 CPM ($ per 1000 page views), or 2.4 cents every time a page is rendered. This bubble will burst.

The average joe is lucky to get $2 CPM. Which I think is much more reasonable.

http://money.cnn.com/magazines/business2/business2 _archive/2006/09/01/8384325/
http://www.sitemeter.com/?a=stats&s=s26techcrunch& r=33

Re:Its all about the CPM

[djaxl]

The average joe is lucky to get $2 CPM. Which I think is much more reasonable.

Depends on one's niche / topic / category. My monthly stock picks site U.S. Stock Screens is pretty high up there, despite lack of new / fresh content, probably because keywords like investing and finance bring in more cents per click.

Also from the money.cnn.com story you link to, "Gawker Media's average CPM is between $8 and $10". I'd say $2 is a little low, although after the middle men take their cut maybe that's what you see. Is it unreasonable to expect $24? Sure.

Page with stats from 2004 showing "Sports & Leisure" averaging a little over $8 CPM and "Entertainment" averaging a little over $14 CPM:
http://www.our-hometown.com/valuation.pdf
http://www.our-hometown.com/valuation.html

Article estimating that Yahoo earns about $4 CPM sitewide (non-search pages earn less than search pages):
http://blog.topix.net/archives/000097.html

Audiences beg to differ

[bagsc]

We're not reliving 1999-2001, we're reliving 1996-1998. The difference is Google, Myspace and YouTube are actual phenomena, unlike Webvan or Pets.com. Myspace is possibly the most popular property on the Internet, and YouTube is the leader of video, which Tech/Telco/Media has been buzzing about for the last ten years. Ebay and Amazon, Internet success stories, are barely fighting off sites like Facebook, Craigslist, Wikipedia, and Blogger.

Baidu, Digg, Flickr, Orkut, Tencent QQ, Photobucket et al are probably going to be worth buying sometime. Get worried when you see sites like LinkedIn and Evite in the news...

Re:Audiences beg to differ

[Anonymous Coward]

Flickr [is] probably going to be worth buying sometime. Yeah, too bad that Yahoo already bought Flickr and is desperately short on money (mandatory unpaid vacations for Christmas).

I would agree that we are not in a bubble. Further, the Web 2.0 hype seems to be fading down to reality rather than skyrocketing into unrealistic IPOs. Google may be overpriced, but there is a (possibly incorrect) justification of their price. Basically, Google's price assumes that they are going to continue growing but at a moderately decelerating pace. If the deceleration becomes sharper, the price will fall. If they maintained current growth rates, the price would actually increase.

The bubble was characterized by companies that were losing money and had always been losing money. Everyone sold for high prices in IPOs. Legitimate businesses with realistic business plans couldn't hire people, as they couldn't afford to match the apparent opportunities of the starry eyed companies. This created a horrible cycle of vaporware.

Currently, investors seem to be avoiding the trap of the late 90s. Instead of buying stocks that they can't understand, they are back to buying stocks with strong fundamentals and track records.

Figures dont lie...

[Lanoitarus]

By the way, the combined cash flow of Spot Runner, LinkedIn and Facebook is less than that of one Costco store.

Cash Flow != Profit.

Costco has a incredibly high cash flow and an absurdly minimal margin. So do grocery stores. Facebook, on the other hand, has what im willing to bet is a pretty high margin on its fundamental product. This has to be one of the most utterly stupid, biased, half truth lines ever.

Heres an equally accurate (and equally misleading and biased) half truth in the other direction:
Facebook has nearly 50 times the profit margin of a Costco, walmart, and target combined. Clearly Retail is a bubble about to burst.

Id take Reaganomics over this kind of bullshit financial analysis any day.

Re:Figures dont lie...

[Anonymous Coward]

You could be confusing revenue with cashflow. Revenue will be your sales and cashflow is the profit or loss over whatever time period you are looking at. Definitions aside, the point being made here is that if you wanted to make more money, you could probably just invest in a single retail store of whatever brand - and it would probably take a whole lot less investment and be a whole lot less riskier. Facebook probably doesn't have 50 times the profit margin of any retail store. The web hosting might be cheap but take into account all the development costs, then the marketing and ongoing enhancements to the site. You would have to look at the books to be sure, but if the profit margin was that high, everyone would be investing and getting a return 50 times greater than investing in Walmart etc.

Re:Figures dont lie...

[Anonymous Coward]

Not that minimal. They do better margins than a lot of their competition. The innovative thing is that they are fixed, perfectly fixed. Walmart takes a different margin on every single product. You pay for the membership for the benefit of having fixed margins. They also give their employees benefits and retain them while doing a wonderful business. It's a great stock to own.

Re:Figures dont lie...

[Sparohok]

Costco earns a profit margin of about 2%. The profit margin of Facebook is probably negative.

Costco earns an operating margin of about 3%. The operating margin of Facebook is unlikely to be higher than about 30%.

So, whatever metric you use, your statement is almost certainly incorrect, whereas Mr. Dagres made a statement that is plausibly correct.

He's not doing bullshit financial analysis. In fact it is textbook financial analysis to use cash flow statements as a bullshit detector. The cash flow statement is a good reality check that will show up problems in a business that aren't obvious in the income statement. As quoted in the article -- "I'll take cash flow over gross margin -- I can eat cash flow."

Re:Figures dont lie...

[unother]

It's not cashflow per se which determines the viability of a business; but in the world of finance cashflow will help determine exactly how liquid an operation is. His metaphor is, admittedly, a bit stretched... but when you compare the mindshare and proposed prospects these companies PR and Financial Advisors snow you in with, he is using a decidely utilitarian and "Old Economy" (note, this is no longer disparaged) method of determining potential for future health.

You see: CASHFLOW is the incomings and outgoings on a day-to-day basis. If you have healthy cashflow, well, you can live on a small margin; you merely push product. This is why the Wal-Marts crushed the K-Marts, and the Best Buys crushed all the local electronics chains that once existed back in the 80s (like Crazy Eddies). Cashflow is a good initial predictor of the future health of a business. Since this is a commodity model we are all following, healthy cashflow means you can constantly freshen and upgrade and moreover bargain for your next deliverables. In the end, cashflow is vital. If cashflow chokes, commodity models self-destruct. This too is why Wall Street is wary of Wal-Mart's recent rumblings about retail; and again, why all those 80s electronics chains folded dramatically and everywhere at the end of the decade.

Furthermore, cashflow is most heavily influenced by direct receipts collected by a company. Lack of cashflow suggests a potentially imperilled business model. And to be frank, I remember online advertising being the end-all and be-all for most sites by mid-2000. Advertising, however is cyclical: companies advertise if consumers are spending and pull back if they are not.

In the end, sites like those are never receiving much cash from their consumers; most of their users are "free" users. This is okay for a collosus like MySpace; they will inevitably monetize it, but if not, so what? With Fox as corporate parent, they are essentially an advertising subsidiary anyway: just one in the new media arena. Just as you don't pay for your Fox affiliates programming, you don't pay for MySpace's programming.

What these sites face without deep pockets is a sudden implosion once cashflow becomes the slightest bit restricted. This was the failure of the Web 1.0 companies. Many of these new ones are not as free-spending but have only marginally more secure business models. Yes, Technorati, I'm looking at you and your refrigerator salesman.

Re:Figures dont lie...

[ubergenius]

You are making wild assumptions. While you may know Costco's profit margin, you are assuming Facebook's is "probably" negative, which I highly doubt. The cost of running an effective web server is very small these days. You can purchase the machine for under two grand, then if you host your machinery in a data center, you are looking at very small annual operating costs. Considering the advertising revenue alone is probably staggeringly high (Ever tried to advertise on Facebook? Do an announcement? See how much it costs per ad, then see how many ads run each and every day on one school's portal, then multiply that by every school/business/region on their networks).

While I don't know anything about the inner financial workings of Facebook, I can assure you that their profit margin is very unlikely to be negative, and could very well be higher than a retailer like Costco.

Re:Figures dont lie...

[Sparohok]

Did you even read past the first sentence of my post? Do you know the difference between operating margin and profit margin? I agree with you that Facebook's operating margin could be not just higher than Costco's, but easily 10 times higher. However it is mathematically impossible to have an operating margin 50 times higher than Costco's as the parent claimed.

As far as Facebook's profit margin is concerned, I believe it's probably negative. The reason I'd say that is that they were lining up venture financing just 8 months ago. I'll certainly grant that their profit margin could have become positive since then, even to the tune of 10 or 15 percent, though I doubt it. It's rare for a company at that stage to even want to be profitable, they would probably consider that a sign that they are underinvesting. The main focus is cash flow break even, because that's where they can stop diluting themselves.

Re:Figures dont lie...

[radtea]

"I'll take cash flow over gross margin -- I can eat cash flow."

Only if there's enough of it to pay off the costs of generating the cash flow in the first place.

While no one number is sufficient to capture the financial health of an enterprise, an over-emphasis on cash-flow was one of the characteristics of the bubble investing in the late '90's. Cash flow management is critical to the success of a startup, but too often investors and managers focused on cash flow maximization at the expense of sustainability.

In the main, I'm with the GP: comparing Facebook's cash flow with that of Costco is uninteresting. Growth potential and long-term margins are what matter. Your comment elsewhere that Facebook has been taking on investors in the past twelve months does give one pause, though: it was one of the characteristics of the Web 1.0 bubble to see companies that had nothing to spend money on but a website get tens of millions in investment, which they spent on frills. Given that Facebook is nothing but a website with an advertising department, one has to wonder what the money is going to be spent on. Superbowl spots?

Re:Figures dont lie...

[Bloke down the pub]

50 times the profit margin of a Costco, walmart, and target combined.

I'd take anything that doesn't think you can add percentages like that.

Re:Figures dont lie...

[jo42]

If you think Facebook runs on one server in a corner of a data center, then you are an idiot and have absolutely no clue what it takes to run a site with that kind of traffic and storage requirements.

Web 2.0 Is Another Bubble Meme

[broward]

Yes, it's another bubble which can ultimately be traced back to fiat money even if Google's stock can't see that its growth inflection point has passed and competition (such as specialized, differentiated engines) is growing. I've been testing out http://www.hakia.com/ and it is occasionally closer to what I'm searching for than Google.

MySpace meme has peaked -

http://www.realmeme.com/roller/page/realmeme/?entr y=myspace_meme_successful_prediction_update

Social Networking meme has peaked -

http://www.realmeme.com/roller/page/realmeme/?entr y=social_networking_meme_verified

Search Engine meme has peaked -

http://www.realmeme.com/roller/page/realmeme?entry =search_engine_comparison

Information has a finite value.
It may not be measurable, but it is finite.

Re:Web 2.0 Is Another Bubble Meme

[nuzak]

> Yes, it's another bubble which can ultimately be traced back to fiat money

The perception of value has nothing to do with a fiat economy. The original tulip craze took place on the gold standard.

Web 2.0 is...

[Ailure]

A stupid marketing term.

Anyone knows where this term comes from?

Re:Web 2.0 is...

[nuzak]

Tim O'Reilly. Go "thank" him for that next time you see him.

Yes, but....

[Anonymous Coward]

Sure, web 2.0 is a bubble. It's a bubble in the same way that dot-coms were a bubble back in the late '90s. Web 2.0 (like web 1.0 before it) represents a legitimately new frontier. As is the nature of most new frontiers there are always a large number of folks who are interested in it but who do not fully understand it. This presents a situation where it's obvious that substantial value exists in an area but many people don't have the experience and knowledge to be able to evaluate the relative value of prospects in that area. This is further muddied by unknowledgeable investors pumping money into bad investments, which confuses other unknowledgeable investors into thinking that there exists value in something because other people seem to think there's value in it. This is the foundation of investment bubble dynamics, people throw their critical thinking skills out the window and decide we live in a brave new world where buying shares of Flooze.com is a sound investment. Eventually, the unsustainable business plans eventually reveal themselves to be just that as they drain investment capital without generating profit, some of the investors gain back some of their critical thinking skills and dump stocks, others follow suit, and the bubble crashes.

Yet, at the end of the day the companies with sound business models are able to stick around. Why? Precisely because those companies are profitable, and able to sustain themselves independent of investment capital, the market doesn't mean life or death for them. These dynamics were as true for web 1.0 as they will be for web 2.0. Good companies will stick around, bad companies will die. And smart investors shouldn't jump on the bandwagon when they don't have the slightest clue where it's headed. Use your critical reasoning skills, use your BS detectors, and don't be swayed by get rich quick investment ideas.

Real Web2.0 Profits

[LilBlackDemon]

The real profits of Web2.0 come directly from the areas we don't think they're coming from. People are very likely, because of the supposed anonymity of the internet, to post things publicly that they normally would not discuss in person. Also, they are more willing to post their tastes publicly than would normally be discussed.

When was the last time you read someone's favorite books, movies, or TV shows off of a Facebook or Myspace profile? What about the comments on some recent product purchase in a blog (that's even what my blog is about)? What goods could you see in the background of the latest hot YouTube video? Ever wonder why your Gmail doesn't want you to delete old messages, even if they're useless, but instead "Archive" them?

"Web 1.0"'s advertising-driven model was about getting users to click on their ads. Companies would throw ads everywhere, with the hope that people would bite. Web 2.0 is more about gathering background on customers so that retailers and manufacturers can market more successfully to them. The ads on digg can look at what you've dugg in the past, so that they can have a more informed base for what they're going to pitch to you. It's one thing to say that a sporting goods company should advertise on ESPN.com and a software developer on Slashdot, but if you take your market research further than you can advertise for the perfect place to go after your team's next home game on ESPN.com or where you can find some good reference books for your language of choice on Slashdot.

It's not about getting in and getting out. It's about the data you collect. And if these companies are smart then they can bill on a subscription model for their customer information databases and be in business for quite some time. This is because background data is vital to marketers, and they will pay exorbitant amounts of money for the data. This should more than offset the operating costs of a website.

Re:Real Web2.0 Profits

[nevesis]

Exactly. Both Google and Facebook have information available to the public about current trends. We all know that their behind the scenes analysis of trends and personal information is staggering. This is the difference.

First, we can massively increase the use of targeted ads, as opposed to just plopping down ads for everything, everywhere. On a related note: the single (semi-targeted) advertisement on a Facebook page stands out considerably more than the mess of banners and text strewn about MySpace. I compare the two using an analogy of a pistol with a laser sight (Facebook/targeted ads/Web 2.0) and a shotgun at 100 feet (MySpace/previous ads/.COM 1.0).

Further, the market research field is extensive. Far beyond what most people realize. "Web 2.0" databases can be used for both formal and informal polling and even be used to accurate predict "upcoming" trends. The use of these databases is seriously unfathomable. For example -- our government could pay for polling to see how many people are favorably discussing X, how many unfavorably discussing X, the epicenter of these beliefs, et al.. and then use this data to craft more effective propaganda. They could even pick out re-occuring phrases or buzzwords and use them against us. Now how much would you imagine Bush would pay for THAT?

Re:Federal Reserve HEY MODERATORS!

[argoff]

It's a bubble because the FED is printing too much money. Eventually foreign investors will figure it out and the dollar will go down the toilet. You've been warned.

I'm sorry, but this should be modded +5 insightfull, not -1 offtopic. The fed printed up a bunch of money, used it to buy US bonds (to finance the war in Iraq), and now people are supprised that the price of every commodity across the board has doubbled in the last 5 years. Well, hint hint, they haven't - in "real" terms it's the dollar that's gone down in value far more than the commodities that have gone up. The only problem is that they loaned out so much freaking money that now society is saturated in more debt than it can pay back. By any standard, the US is bankrupt.

Well, guess what. They only have one choice: "print up money and buy stocks" and that's exactly what they've been doing. But it will fail for the same reason that any central planned economy fails, and it will be very very ugly. Forget stocks, people should buy gold and prepare for the US dollar not to be a currency anymore. It really is that bad.

great!

[huckda]

By the way, the combined cash flow of Spot Runner, LinkedIn and Facebook is less than that of one Costco store. now we're going to see a bunch of /.'rs going out there and opening up Costco stores...good job!

5 Web 2.0 URLs

[neelm]

flickr.com
technorati.com
digg.com
youtube.com
wikipedia.com

Not one of those sites provides it's own content - all content is users generated "for free". Every one of those sites allow you to publish the content on your own site "for free". You can keep up to date with new content without visiting the sites "for free".

If you don't understand the difference between this and nytimes-registered-users-only content, then it's no surprise you don't get the difference between the old web and the direction the web is going.

If you think Web 2.0 has something to do with AJAX, you need to read more sites than just /.

Re:5 Web 2.0 URLs

[ralphdaugherty]

If you think Web 2.0 has something to do with AJAX, you need to read more sites than just /.

      I read more sites than slashdot, and while content providers such as you list are the first to come to mind for Web 2.0, AJAX is referred to fundamentally as the basis of Web 2.0 in the technical press.

      Not that the technical press ever did anything but write about buzzwords.

  rd

Re:5 Web 2.0 URLs

[neelm]

Review your history of the term: http://en.wikipedia.org/wiki/Web_2.0

AJAX - the name and use - is only a side effect

Re:5 Web 2.0 URLs

[ralphdaugherty]

Review your history of the term.

      I am fully aware of the history of the term and technology. My statement of its basis for Web 2.0 in the technical press stands as I posted.

  rd

Re:5 Web 2.0 URLs

[neelm]

Okay... when did O'Reilly become not a member of the "technical press"?

Was it when they stopped putting animals on every book cover? Tragic that...

Re:5 Web 2.0 URLs

[ralphdaugherty]

O'Reilly is certainly a foundation of internet technical publishing. But Google Maps caught the imagination of many and the technical press went to town on the wonders of AJAX as Web 2.0.

      Certainly other broadband enabled user content sites was a second component of the resurgence.

      But some posted they thought it took both together to be Web 2.0, and as you have indicated, it isn't.

  rd

Thats not true anymore

[Anonymous Coward]

That was true, say 2001-4. But it certainly is not true anymore. Believe me, I was surprised when I found out.

In 2004, you could put a job application up on Monster, and get innundated by resumes. However, two years later, the reality completely changed. At my old job, we were hiring in 2006 and were expecting to get innundated by a tidal wave of resumes, assuming that the process would repeat itself. Boy were we wrong.

So I started looking myself. And when I put my resume up on Monster, I got innundated - by recruiters hustling me. Any day of the week I got at least three calls, if not more. And I was able to change jobs, and got my salary bumped up by $20k.

Open your eyes.

Re:Federal Reserve HEY MODERATORS!

[shystershep]

Did you live through the 80s? If so, were you awake and/or at all aware of the U.S. economy?

If so, I can only assume that you have no understanding of economics if you think we're so much worse off now.

People gripe and moan about the failure of our education system related to the hard sciences, but compared to the social sciences such as history and economics the hard sciences are doing pretty good.

Business as usual

[PingSpike]

The whole thing smacks of business as usual to me. Lots of shitty companies with bad ideas flood into the market and die, and a few clever ones succeed. The same stuff happens in the 'real world'. The only difference is we don't call it 'Real World 2.0' every time the tides turn.

Now, I'm not economist, but a lot of investors lost their shirts in the dot-bomb and going to be put off the technology sector all together. I'd say thats going to act as a mitigating factor. People aren't just asking whats the hot company anymore, they want to know how the company is going to make money.

On the other hand, google did buy youtube, the website with nothing but multi-million dollar bandwidth bills and rampant copyright infringement as features so maybe I have no idea what I'm talking about!

Re:Business as usual

[budgenator]

Well don't forget all, or at least some the mad-money the was once the investor's shirts went somewhere, from what I understand the salvage equipment from the dotBomb is just now drying up; yet still it's good strategy to invest most of your money in rock-solid companies will proven and boring profit records, and to put a little bit in high risk whacko stuff that just might pay off instead of taking a vacation in Los Vegas.

youtube and google is actualy a good fit google lives and breathes bandwidth management, and youtube is wild and crazey bandwidth-hog so its kinda like a ying/yang thing with them.

Re:Federal Reserve HEY MODERATORS!

[budgenator]

I have to disagree with you about that, both sciences, social and hard suffer from the same basic thing, a lack of the ability for ordinary people to engage in critical thinking. let's look at the great depression, the money system was deflated, unemployment was about 25%, pump up the debt and use the extra money to put people to work, the results was it cause inflation, and fixed the money system and ended the depression; next come the '80s the money system is inflated 6-8% inflation, unemployment is about 12% and Carter does the good'ol spend up the debt thing and what happens, inflation goes from 6-8% to 12-14% ! Hello people it's really pretty easy, money needs to be inflated spend up the debt, money needs to be deflated spend down the debt, right now with inflation about 2% we should be at balanced budget.

the O'reilly trademark might speed things up

[SuperBanana]

O'Reilly has trademarked "Web 2.0".

The note about revenues compared to one Costco store is pretty sad. It makes me wonder where any of the other "blogger" "elite" sites stock up. I always deeply suspected that most of the "web 2.0" and "blogger" fad was just a giant San Francisco circle jerk by people who think far too highly of themselves.

Re:Federal Reserve HEY MODERATORS!

[Colin Smith]

I reckon you're basically on the right track, but it's very unlikely to result in armageddon. What'll happen instead is that china, japan, opec etc will get tired of losing money on their dollar reserves and will diversify (are already diversifying) and start selling the US bonds, the dollar will fall further, interest rates will rise further.

It will however balance out. China, Japan and OPEC can't simply dump 2-3 trillion dollars worth of bonds, they would be insane to do so. Instead they'll simply make Americans pay their debt. The US is just going to be saddled with high interest rates and high inflation for a while. At the end the dollar probably isn't going to be such a favoured reserve currency and Americans will have to work that little bit harder, just the same as the rest of the world.

They do currently have another option. Stop printing money and start running a surplus budget.

Oh Btw, the big problem isn't Iraq, that's just causing a gradual slide, it's the retirement of the baby boomers, we should start to see the effects fairly soon.

Re:Federal Reserve HEY MODERATORS!

[Deliveranc3]

Hi from Canada,

We're pretty scared that the Chinese will stop keeping the American dollar afloat (They have a static exchange rate) or that OPEC will make oil transactions in Euro's instead of U.S. dollars.

If either of those happens we're going to be looking at a BIG BIG BIG recession.

Don't take us with you plz! Just FYI! K Thx bai!

Re:Clones or no clones, it's the insight into peop

[Anonymous Coward]

"I welcome any sensible debate on this..."

Well, spazmo, get a fucking grip becasue yur WRONG and your mom smells like gas.

Re:Federal Reserve HEY MODERATORS!

[rachit]

A good number of historians would disagree you on that. Most say WWII ended the Great Depression.

And your comments about inflating / deflating are very simplistic. One of the main problems we have today is China / Japan are buying too much US debt. They are doing this to keep the US dollar up so that we buy more crap from them so their economy keeps running. They can't stop, otherwise they go into recession too.

One of these days something is going to give and we're all going to go down together, but I think the US will be in the worst trouble. (China maybe experiencing a Japan-style 10-year deflation?)

Re:Federal Reserve HEY MODERATORS!

[Apotsy]

If the USA economy goes in the toilet, so will those of a lot more countries than just Canada. China for example will feel the pain too, since the US is a very large consumer of their goods. If the US can no longer afford to buy its products, there goes their double-digit growth rate.

This doesn't sound like Paul Graham

[teutonic_leech]

I do agree with the comment, but disagree with calling this the 'Paul Graham Business Plan'. Paul has dozens of essays on his site which propel entrepreneurs to do exactly the opposite - produce real value by solving tough problems. He's also very adament to raise very little money at first and that too much money can actually kill a start-up. Anyway, take a look at his site: www.paulgraham.com

Re:This doesn't sound like Paul Graham

[Anonymous Coward]

Paul Graham has routinely said to forget about making money, just worry about becoming popular. The quote seems to be attacking that notion, as a lot of web 2.0 startups cannot make money unless they are bought out. Just look at the startups Y Combinator has funded.

Personally, I see Paul Graham as someone comparable to those late-night real estate tapes infomercial. "I got rich on startups and you can to! Just use my patent system!"

Sounds so familiar...

[Junta]

Yes, all those sites are highly popular, but there were sites that were popular then too. Just because you are popular doesn't mean your business plan is viable in terms of long term expense to income ratio. To some extent, companies then that may have otherwise been reasonable got caught up in the hype and overextended themselves. I worked at the time for a company that had been stable for several years before the excitement of the late 90s. They weren't particularly exciting, but they held their own. Their business plan was viable, though conservative. The whole dot-com thing started rolling, getting formerly sane business people excited, they started getting ready to go public, bought expensive computer and networking equipment because they thought it would help, started dishing out perks to employees and overpaying for consulting, etc etc, all on the premise that going public in the dot-com scenario and their product would be perfect. Needless to say, that company is effectively defunct now. Same here, I hate to be doubtful of everyone's current favorite company, but Google's situation stinks to high heavon of the .com days. They are a popular site that gives services for free and relies on advertising revenue. Google's advertising is more directed and popular, therefore worth more, but at the same time based on their recruiting and their ungodly number of servers, they are simultaneously pissing money away like crazy. Maybe it is sustainable, maybe it's only sustainable transiently (and advertisers will get bored, refuse to pay so much, etc), or maybe their expenses are exceeding their income until their hope of things turning out right or a plan of theirs is hatched. It's just an unprecedented amount of money being spent and infrastructure for an almost entirely ad-supported business. Business cases can matter, if a site is a business and their business case flops, they will not be able to provide the popular service.

Same with myspace and youtube (now google). They are immensely popular and sometimes usefel, but is the business case sane? You say the media has been buzzing about what youtube ultimately did for the last ten years, but buzz does not mean it isn't a bubble. Buzz in fact is a strong indicator that it could be a bubble.

Ebay and Amazon last I checked were doing just fine, with a healthy and obvious business case. These are examples of businesses that arose during dot-com days with staying power and a sound business case. Their existence did not mean there was no bubble since two companies could be pointed to as not failures.

The other sites, some are overhyped sites that will fail, some are not getting caught up in overextending themselves (Wikipedia is not a business, and from all accounts is not going spend-happy, so I think they'll stay sane.

Now the one counterpoint is broadcast television, also almost entirely ad supported, and probably if you put the investment nationwide into television broadcast stations, you probably are spending more than google. By the same token, however, the ads in broadcast television until recently have been in the users face and not practically skippable (VCRs too much a pain in the ass to record every show, DVRs make it painless), and in the face of DVR installations, many primetime shows have resorted to realtime giveaways/contests to encourage people to watch before their DVRs can hope to have enough recording to skip commercials.

No, as long as companies don't over do it.

[Anonymous Coward]

The original bubble was caused by several major factors:
1) The principals of the companies where over optimistic of what their product can do
2) The principals of the companies didn't set proper goals for their product
3) The principals of the companies used money without proper controls
2) The principals of the companies and financial analyst over optimistic about what the internet can do
4) The financial analyst and investors never really understood what they where investing in
5) The financial analyst and investors never checked how their investments were run
6) The financial oversight people and the company principals never checked the books of the companies
In short, Alan Greenspan said it the best and "irrational exuberance" was happening during the bubble.

Re:Federal Reserve HEY MODERATORS!

[argoff]

Uhh, the 80's didn't have an account deficit of over 6% - I'm sorry but that's Argentina territory. Also, during the 80's they raised interest rates to 21% to halt a panic out of the dollar. If they do that today, the US economy will be ripped to shreds.

Re:Federal Reserve HEY MODERATORS!

[jlarocco]

A good number of historians would disagree you on that. Most say WWII ended the Great Depression.

Obviously, a good number of historians never went very far with economics.

There's a fair amount of evidence pointing towards a recovery from the depression even without WWII. The government was starting to buy a lot of highways, bridges, and other public goods in order to put people to work. Of course WWII sped up the process a great deal, because suddenly the government needed a shitload of planes, soldiers, boats, guns, bombs and everything else. At the time, they didn't have very many of those things (relative to what it needed), so they started buying a whole bunch of them.

So yes, WWII greatly sped up the process, but from an economic standpoint, it wasn't necessary to end the depression.

MySpace vs YouTube

[rinkjustice]

You can't tell me myspace.com is worth 850 million. That's just rediculous. Even in it's prime, Myspace was nothing more than a flea market of degenerate culture. But then again, I look at Rupert Murdock's other holdings and I can see why he was so enamoured with it.

YouTube is different. I see potential here. If anything can penetrate the caustic grip of the few transnational corporations who own the media and information in United States, it may be Google's YouTube. There are a number of ways they can generate revenues throught the site, so we'll see how it all unfolds. My fingers are crossed.

Re:Federal Reserve HEY MODERATORS!

[Dragonslicer]

The only problem is that they loaned out so much freaking money that now society is saturated in more debt than it can pay back. By any standard, the US is bankrupt.

Granted, it's worse now than it has been in quite a while, but when was the last time that the US wasn't in massive debt? I think we've been technically (insert "and morally" joke here) bankrupt for a very long time. I'll be quite impressed if we even have an economy of our own by the time I die.

Like, sooooo 2006

[plopez]

It's all web 3.0 now. 2.0 was a flawedconcept, go with 3.0. It is the most reliable, most secure, largest ROI and lowest TCO http://www.iht.com/articles/2006/05/23/business/we b.php

It leverages collaborative synergies in an open and proprietary way to deliver value for interactive component architecture.

It is so now, so modern so YOU! The smart set are 3.0!

Seriously, does anyone doubt me when I say that IT is just like the fashion industry?

That's why in 6 months I hope to be done with it.

Silly Canadians

[SRA8]

Silly Canadians. You have enormous oil reserves. Guess what that means? It means we Americans will find some "evidence" or another to invade your country and take all your resources. All that war booty inflow will help us pay the debt on our treasury bonds for decades to come.

Re:Silly Canadians

[Ceriel Nosforit]

I wish I had mod points again. :D

Re:To point out the person pointing out the obviou

[Anonymous Coward]

Water should be free.

web 2.0 - forget it, run silent, run deep

[cogno64]

Some ideas... Return to your roots. Forget bubble hoopla, focus on solid operating plans, and execute. It's interesting that web 2.0 popped up, however in our case we're focused on a larger population/sociological phenomenon. Avoiding fads that do not add value is wise. However, if there is some meaningful stuff in web 2.0, which is really different than what people were doing in the 2001=2002 nosedive, it should be considered. But there's not much of that, really. Whether or not something is web 2.0 has no impact on revenue and profits, I am not sure if having a tagcloud rather than an ad makes sense. What is the revenue coefficient of the tagcloud? The last point, design - simplicity - for the person who just wants to get in, do something worthwhile, then get out, the a service should support this imperative. Remember that those who know or care about web 2.0 are in the small minority of active web users; by the time a larger group knows about it, it will be over.

Slashdot Skeptics

[FreshFunk510]

As someone who works for a company that would probably qualify as "Web 2.0", I'm really sad to the see the skepticism of Slashdotters. I can understand why though: it's the Slashdot bandwagon to jump on. Dump on Web 2.0 because it's all just hot air.

Personally, I'm refreshed at the resurgence of technologies since 2003. After the bubble burst, there was little or no investment in tech/Silicon Valley. It was no-mans land.

Since then, I've seen a bunch of products that would be classified as Web 2.0 that I found exciting. To many it's just a marketing word, but to some, like me, it means an evolution of what we had from "Web 1.0" (or the web back in '96-'01).

Here are some:

• digg/reddit: stories that are truly user moderated. sure it's not perfect but a way for the community to submit and vote for stories. more freestyle than slashdot.
• flickr: finally someone got something that had been done (photos) but made it easy and friendly for everyone.
• myspace/facebook/your social networking site here: yes, the social thing has been way overdone. but after you get over the initial bitter taste in your mouth, you realize that there is some value with maintaining a network of friends. more competition can only mean better products. as much as you mock the wanna-bes, competitors or the fact that a concept seems overdone, competition drives innovation.
• youtube: video for the masses. certainly didn't exist in web 1.0. sure a lot of it is copyrighted content, but there IS a large amount of legitimate use if you actually use it that way. i personally use it to upload videos i want to share with friends. i've also found some individual artists that create AWESOME content.

I can go on and on. Web 2.0 doesn't just mean AJAX. And, frankly, AJAX has made interface much better in some ways. All user-generated content isn't crap. Yes, there are lots of it but you'd be stupid not to expect it. But don't let the crap make you think that there are no gems. And, finally, there is some value behind social networking and bringing the web to the common person who is not a geek, does not know HTML, barely has a concept of a URL, and simply wants to use the web to share their digital photos, home videos, or maintain their network of friends online.

Re:Federal Reserve HEY MODERATORS!

[Ceriel Nosforit]

This has always confused me. I have such trouble understanding how war improves economy. Tom me it seems to go like this;

1. Gov't needs to buy bombs. Buys them with money collected from taxes.
2. Private companies sell bombs, uses money to pay salaries.
3. Salaries are taxed, leftovers used to buy fun and useful things.
4. Bombs are dropped, destroyed, along with resources and infrastructure (plus fun and useful things).
6. After the war, gov't buys new infrastructure to replace the old.
7. Private companies sell infrastructure...
8. ...Rinse and Repeat...
n-1. ???
n. PROFIT!

To me it just appears as if it's endless wasting of resources. Maybe if we stopped paying taxes we could put an end to war or something...

Re:Federal Reserve HEY MODERATORS!

[Opportunist]

As long as the US has the ability to "tax" foreign countries, all is well.

How? By having the de facto international currency. Take a handful of dollars and you'll see that they are accepted as legal tender pretty much everywhere on the globe. Yes, even in countries like Iraq or North Korea. For the simple reason that those countries need Dollars for international trade, too.

Pretty much every country on this planet has Dollar reserves. The price of internationally traded goods is given in USD, and more often than not paid in USD too.

This allows the US government to effectively "tax" other countries. An inflation in the USD has actually very little consequence for the stability of the USD, simply because many countries have to follow it, because their stock in USD becomes less valuable, too. If another currency had been printed in the amount the USD has been in recent years, the only thing left to do would have been to devalue it because the inflation would have been running rampart.

The USD, though, only lost very slightly towards many currencies, and even there only towards currencies that are not tied to it altogether. Currencies of countries that hold almost all their foreign reserves in USD have been "stable" towards the USD. We're talking here a loss of about 20% towards the Euro or Yen, when effectively it "should" have lost closer to 70%.

What keeps the USD afloat is the fact that it is the guiding currency in international trade.

Time for Web 3.0!

[Opportunist]

Seriously, why did we wait so long? It's been a very dry spell between Web 1.0 and 2.0, with about 5 years of unemployment and underpaid jobs for us geeks.

For the future, we should aim to launch the next gen faster. It seems investors don't care about their money anyway. One should assume that they've learned their lesson after the dot.com bubble burst. That the market isn't limitless and that copying a concept isn't profitable.

Well, it seems they don't learn. It's just the same crap all over. A handful of sites with good ideas, quickly copied by others. So let's start brainstorming for the Next Big Thing (tm), so we got something ready to use as a carrot for them when this bubble blows up.

Re:Time for Web 3.0!

[Anonymous Coward]

Does the U.S. produce any tangible item at all any more? All IT jobs going to India so why bother? Food products coming from overseas, manfactured and textile products. I am serious, What do we produce here in this country? Wages are so low we have to rely on illegal immigrants to work here in this country so we can busy ourselves doing what? If you do not work for the government or are guarding prisoners somewhere then where is your future? Its headed overseas and I really do not see the return on investment everyone talks about. Cheaper prices, yeah but for how long when theres no competition left do you really think american corporations are going to keep prices low when there is no competition. Large monopolies will control what you watch, eat, wear, drive, etc... Money the root of all evil and we continue to screw ourselves. How much would it cost and is there any possible way to take back our country. We have lost our country and its been sold out from underneath us by big business. Sure stocks are up. Why would they not be when your paying a dime an hour wage to some kid in another country. We really should pass laws thats workers in foreign countries make the same wages as this country (not compatiable with their economy but the same dollar wage). BUT, how can anyone buy U.S. products if we are not producing any HERE! Off topic I am sure rambling on and on and on....

Unemployment is irrelevant

[brokeninside]

Traditionally about a quarter of the workforce was busy looking for a new job. So the competition for any job was 25% of the workforce + the unemployment rate. In the fast few years with chronic underemployment and a decline in real wages closer to three quarters of the workforce is busy looking for a new job at any given time.

Re:Unemployment is irrelevant

[Anonymous Coward]

You're right, unemployment figures are irrelevant. But what is relevant is the fact that every decent technology worker is employed; and there are still open positions. The one still unemployed are the ones that cannot write code to average an array of integers.

I've seen the recruiter thing

[brokeninside]

But I'm hesitant to think it means anything that scads of recruiters are all jockying to send my resume to fill the same set of requirements.

Things may be getting better, but they are still no where close to what things were like during the dot com bubble when the really good people were getting lured away from their employers by insanely lucrative salaries and the firms they were hired away from faced a genuine shortage of skilled workers and started hiring just about anybody that knew anything about computers to fill vacancies.

Keep Web 1.0 Alive!

[Sigg3.net]

Facing the latest development, I've started an organization to keep web 1.0 alive.
What we stand for is simple. Keep your greedy hands off of our internets!
Please e-mail your details to donations(at)web10alive.org to donate. For the people and the children.

Re:Federal Reserve HEY MODERATORS!

[Talchas]

Except that the US didn't lose infrastructure, so we made out good.

A tech worker working at McDonalds is employed

[brokeninside]

Perhaps you fail to understand what underemployment and a decline in real wages actually mean.

Re:Federal Reserve HEY MODERATORS!

[Orestesx]

I don't disagree with your analysis, but Americans already work damn hard.

Re:Federal Reserve HEY MODERATORS!

[Anonymous Coward]

The problem is that is slowly changing.

Re:Federal Reserve HEY MODERATORS!

[databoing]

Americans will have to work that little bit harder

Kutaragi-san, is that you?

Re:Federal Reserve HEY MODERATORS!

[Ceriel Nosforit]

There are lots of contracts, big contracts, to rebuild Iraq. The locals aren't paying for it.

You ignored my point

[Anonymous Coward]

That is exactly why I said that the figures themselves are irrelevant. Though don't let that observation be an excuse to disregard reality.

You ignored the underlying truth - the only tech workers that ended up at McDonalds are the ones that are incompetant and should have never been in the field in the first place. For the people with a shred of talent, wages are up and unemployment _and_ underemployment are virtually nil.

Web 2.0 is a bubble!?!?!?

[Anonymous Coward]

Is 'Web 2.0' Another Bubble?
If it is, then I need to know where I can get the bubble soap.

Sustainability

[sacrilicious]

Hornik writes: ...'[Ideas] that do bear fruit will gain traction and either be acquired or go public. Those are the traits of a rational market in my mind.'

I find it odd that so many people think like this. I.e., that to be a success a company MUST be bought, either by the public or by another company. In either scenario, the company being bought loses most of its capability to be rational and agile... so selling is an act that destroys value quite a lot of the time, not just in terms of lost profits to the company, but in terms of lost quality available to the public via the company's output, and lost diversity in the marketplace. Remaining privately held, and making enough money to meet expenses and stream some profit to enough interested parties, is a worthwhile and oft overlooked goal.

Are we STILL discussing if such a thing exists ?

[unity100]

The only time web 2.0 comes to my mind is when clients ask "some little bit of this and that" to "lighten up" their site. and they dont seem to care much about it either.

Re:Federal Reserve HEY MODERATORS!

[budgenator]

well
ITEM 1: Gov't needs to buy bombs. Buys them with money collected from taxes.
not all the money is from taxes, some is borrowed from people/institutions and are called bonds, now the "money" your talking about is called M1, cash and checkable deposits, the bonds are called M3, and both are money, just different kinds. When a statement about economics is made, the part that typically left out is the "Other things being equal" part. Increasing the money supply faster than the demand for the money makes it less valuable (the Money) that's called inflation; if jobs go up with the money supply, the workers will absorb the money, making it more valuable and thats called deflation, the real trick is to keep a balance like the scaffold the window washers use to clean a skyscraper's windows, one side can get a little out of level, but a lot out of levels and the whole thing can tip.
ITE:6:. After the war, gov't buys new infrastructure to replace the old.
after new add better, more efficient and longer-lived, after old add less-inefficient worn-out, short-lived
ITEM 2, 7: add pay taxes.

But that's pretty much it, think of it this way, the school bus driver and the lunch-line ladies from high-school are in IRAQ, working for KBR and getting paid $80-100K, that's sure boosting their personal economies, and their newly hired "Wealth Management Consultants" is going to keep that money turning over in the economy.

Re:Federal Reserve HEY MODERATORS!

[novus ordo]

Lets take that a step further: what is keeping the dollar the "international currency?" The Petrodollar. I don't think you're aware that you can only buy oil for dollars (Iran is trying to change that though; Iraq tried guess what happened).

Re:Federal Reserve HEY MODERATORS!

[Anonymous Coward]

i have to agree... how many people had interest only, variable rate mortgages in the 80s? 21% interest rates would rock the united states to its foundations.

as someone mentioned earlier, knocking the buck off as the oil currency is the first step. from what i understand, iran is looking to use the euro to sell oil. i also understand that saddam started to sell oil in euros... and, well... we all know what happened to him.

Web 2.0

[vision864]

Can i PLEASE be the one to shove the pin in on this bubble
What they call web 2.0 is essentially what happened to TV when it decomposed into the word "Reality".

what in the fuck is "web 2.0"?

[Anonymous Coward]

subject says it all.

Re:Federal Reserve HEY MODERATORS!

[Ceriel Nosforit]

Yes, but it all boils down to a very simple thing; things are built, then promptly blown up only to rebuild it. That's a monumental waste of resources. Would be better to repair the old stuff and only build new when it's actually needed. The economy would cool down, but who says that's a bad thing? If I repair and maintain my old things (write faster code instead of constantly buying new computers, for example) I can spend my money, and therefore the world's resources, on something better.

Removing money from the equation, it'd mean that instead of constantly building a completely new, better and more complex cell-phone I'd improve on the one I have and use the extra time to work on for example a space station.

Let me repeat; a SPACE STATION! ;)

Re:Federal Reserve HEY MODERATORS!

[Bastard of Subhumani]

Yes, but it all boils down to a very simple thing; things are built, then promptly blown up only to rebuild it. That's a monumental waste of resources. Would be better to repair the old stuff and only build new when it's actually needed

I see where you're coming from, it's related to the broken window paradox/fallacy. The thing to bear in mind is, when we build stuff it boosts our economy, but in a war, you generally (sorry) try to blow the other sides stuff up.

Re:Federal Reserve HEY MODERATORS!

[Ceriel Nosforit]

That type of warfare ended with WWII. Today in the global economy there is little difference between friend and foe, as evident by the enormous amount of cash pumped into rebuilding Iraq. Yet we (Well, some of us.) still insist on blowing things up even though we know we get the bill after the party. Yet, writing the bill up as debt and never paying it seems to work perfectly fine too! Debt decreases the value of currency, which in turn increases export.

It seems like employment is more important than production. Doesn't matter what you're doing, as long as you get paid. So absurd... I'm sure economists get all the best drugs...

Re:Federal Reserve HEY MODERATORS!

[budgenator]

Actually the more common reason for war is to bring your opponent back to the negotiating table in a more receptive mood. A nation has three sources of power, diplomatic, economic and military and they are best used in that order. The blowing stuff up part is pretty much a side effect, gratuitous destruction is self-defeating because sooner or later you're going to have to go back to negotiations with the country that you were negotiating with before the war that was caused by the breakdown of negotiations. The activity of killing your enemies or bombing him into the stone-age isn't war it's genocide, most mistakenly think the two are related.

Re:Federal Reserve HEY MODERATORS!

[ralphdaugherty]

If so, I can only assume that you have no understanding of economics if you think we're so much worse off now.

      Last 6 years has run up triple the debt of the 80's (3 trillion versus 1 trillion).

      We're now paying for both the 80's and 2000's.

      The only thing keeping us going is China and Saudis loaning us money so we can keep buying their stuff, and run that debt higher.

      The only reason everyone won't bail at once is they don't want their dollar holdings to collapse, but they will be "diversifying" in greater and greater numbers.

      The only thing that will drive home how much we owe is when there's a borrowing crisis, which will happen when enough "diversification" takes place.

      Our children and grandchildren will be none too pleased. Already 18% of federal budget is for interest on all those loans. That's just interest.

      And that doesn't even count all the Social Security "borrowed" that has to be paid back.

      OP was being too kind.

  rd

Re:Federal Reserve HEY MODERATORS!

[ralphdaugherty]

Oh Btw, the big problem isn't Iraq, that's just causing a gradual slide, it's the retirement of the baby boomers, we should start to see the effects fairly soon.

      How many will be able to afford to retire?

  rd

Re:Federal Reserve HEY MODERATORS!

[Opportunist]

Well, some countries are talking about it. A few tried. Iraq, for example.

The response is known.

Re:To point out the person pointing out the obviou

[nick_davison]

Clearly you're thinking of beer. Who cares if we're dirty or not? Thirsty... now that's important.