Web 2.0 Bubble May Be Worst Burst Yet

athloi writes with a link to an editorial by John Dvorak over at the PC Magazine site. Rather than his usual tilting at windmills, Dvorak turns his attention to possibility of another big internet economy 'pop': "Every single person working in the media today who experienced the dot-com bubble in 1999 to 2000 believes that we are going through the exact same process and can expect the exact same results — a bust. It's déjà vu all over again. Each succeeding bubble has been worse than its predecessor. Thus nobody is actually able to spot the cycle, since it just looks like a continuum. I can assure you that after this next collapse, nobody will think of the dot-com bubble as anything other than a prelude." It certainly seems like another burst is imminent; will this one be worse than the original, or have less of an impact?

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Thank you

[popo]

I can't tell you the number of times I've stared in amazement at this latest crop of Web 2.0 startups that look, smell and sound exactly like their Web 1.0 counterparts. The basic underlying problems of generating critical mass, ad revenue, and basic business model stupidity haven't changed. The insane multiples that go into valuations haven't changed either: Consider that most brick and mortar businesses are valued at a small multiple (if any) of annual revenues, but web companies are still valued at a ridiculous 15x - 20x multiple despite their hilariously grim prognosis for survival. And the revenue strategy still seems to be "Selling the whole shebang" rather than "Earnings" (remember "earnings"?), and the vast majority of ideas don't seem to be new, or remotely defensible against competition (Barring of course absurd claims of intellectual property and patents).

If this isn't a bubble I don't know what is.

But then again, there's a sucker born every minute.

I have a killer dot-com business plan (Web 2.0, of course) if any venture capitalists want to give me a call.