Friday, November 10, 2006
Bubble Burst Around the Corner
Web 2.0 companies looking to cash in by being acquired had better stay near their Blackberries. At the FourSquare investor and media conference there was ample interest in Facebook and the like, but the money holders warned that their guarded enthusiasm might not last much longer, according to the New York Times.One media exec was quoted as saying "We’ve seen how this movie ends," referring to the over valuation and subsequent fall of web start ups. Digg and Brightcove were also mentioned as companies ripe for acquisition.
What's different this time around is that these companies aren't trying to go public, so they have less leverage in negotiating with suitors. The competition between Yahoo et al has been enough to make YouTube's day, but we are now largely onto second tier acquisitions.
I'm guessing that if these companies aren't purchased by spring, they will have to build their success solo or fade into history.
While history will remember Web 1.0 as more of a cultural and economic phenomenon by opening the doors to the Internet, Web 2.0 will probably have a longer last effect on companies through the introduction of useful tools for rich media and greater user participation. Before we could see lots of interesting stuff; now more of us will be part of it.
Posted By John Gartner at 01:40 PM
Permanent Link: Bubble Burst Around the Corner
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