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Is 'Web 2.0' Another Bubble?

Zonk posted more than 7 years ago | from the pop dept.

Businesses 209

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.'"

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Is that a lot or a little? (3, Funny)

ScentCone (795499) | more than 7 years ago | (#17392934)

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? (1)

seanadams.com (463190) | more than 7 years ago | (#17393208)

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? (1)

Salvance (1014001) | more than 7 years ago | (#17393450)

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.

Figures dont lie... (5, Insightful)

Lanoitarus (732808) | more than 7 years ago | (#17393438)

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.

Web 2.0 Is Another Bubble Meme (0, Troll)

broward (416376) | more than 7 years ago | (#17393446)

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/ [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 [realmeme.com]

Social Networking meme has peaked -

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

Search Engine meme has peaked -

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

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

Re:Web 2.0 Is Another Bubble Meme (1)

nuzak (959558) | more than 7 years ago | (#17393630)

> 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.

Re:Is that a lot or a little? (3, Funny)

Colin Smith (2679) | more than 7 years ago | (#17393454)

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? (1, Funny)

Anonymous Coward | more than 7 years ago | (#17393622)

That comment has officially jumped the snark.

Shhh... (0)

Anonymous Coward | more than 7 years ago | (#17392936)

let us make our money first.

Re:Shhh... (1)

joeyspqr (629639) | more than 7 years ago | (#17393658)

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

There is no such thing as Web 2.0 (5, Insightful)

phrasebook (740834) | more than 7 years ago | (#17392950)

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 (1)

nate nice (672391) | more than 7 years ago | (#17393060)

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 (1)

chromatic (9471) | more than 7 years ago | (#17394160)

But, is anything in Web 2.0 even defined?

You could consult the guy who popularized the term: Web 2.0 Compact Definition [oreilly.com] .

Re:There is no such thing as Web 2.0 (1, Insightful)

Anonymous Coward | more than 7 years ago | (#17393758)

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.

the O'reilly trademark might speed things up (1)

SuperBanana (662181) | more than 7 years ago | (#17394258)

O'Reilly has trademarked "Web 2.0" [oreilly.com] .

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 [xeni.net] .

yes no fud notfud maybe (1, Funny)

WilliamSChips (793741) | more than 7 years ago | (#17392956)

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

Federal Reserve (3, Insightful)

P3NIS_CLEAVER (860022) | more than 7 years ago | (#17392960)

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 (1)

kfg (145172) | more than 7 years ago | (#17393094)

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

Lacking knowledge of economics? (0, Interesting)

Anonymous Coward | more than 7 years ago | (#17393192)

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? (1)

PenGun (794213) | more than 7 years ago | (#17393358)

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? (0)

Anonymous Coward | more than 7 years ago | (#17393684)

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? (1)

P3NIS_CLEAVER (860022) | more than 7 years ago | (#17394138)

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? (1)

Colin Smith (2679) | more than 7 years ago | (#17394374)

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 [ft.com]

 

Re:Lacking knowledge of economics? (1)

xENoLocO (773565) | more than 7 years ago | (#17394128)

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? (0)

Anonymous Coward | more than 7 years ago | (#17394168)

> 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? (0)

Anonymous Coward | more than 7 years ago | (#17393452)

"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:Federal Reserve HEY MODERATORS! (4, Interesting)

argoff (142580) | more than 7 years ago | (#17393668)

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.

Re:Federal Reserve HEY MODERATORS! (1)

shystershep (643874) | more than 7 years ago | (#17393838)

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.

Re:Federal Reserve HEY MODERATORS! (1)

budgenator (254554) | more than 7 years ago | (#17394230)

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.

Re:Federal Reserve HEY MODERATORS! (1)

rachit (163465) | more than 7 years ago | (#17394366)

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! (5, Insightful)

Colin Smith (2679) | more than 7 years ago | (#17394284)

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! (1)

Deliveranc3 (629997) | more than 7 years ago | (#17394318)

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!

A bad thing? (4, Insightful)

Potor (658520) | more than 7 years ago | (#17392972)

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?

Web 2 - Cash Flow? (1)

villy (199943) | more than 7 years ago | (#17392984)

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.

NO (1)

imsabbel (611519) | more than 7 years ago | (#17393028)

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 (1)

Breakfast Pants (323698) | more than 7 years ago | (#17393378)

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 (1)

P3NIS_CLEAVER (860022) | more than 7 years ago | (#17393404)

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

Re:NO (1)

edflyerssn007 (897318) | more than 7 years ago | (#17394328)

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

High Startup Cost (5, Insightful)

Bonker (243350) | more than 7 years ago | (#17392992)

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.

Business as usual (1)

PingSpike (947548) | more than 7 years ago | (#17393898)

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 (1)

budgenator (254554) | more than 7 years ago | (#17394326)

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.

Facebook and MONEEEEY (1)

probielantow (1037952) | more than 7 years ago | (#17393006)

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.

Send text 'IWantToRuleFaceBook' to number *1234? (0)

Anonymous Coward | more than 7 years ago | (#17393276)

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.

Web 2.0 Url Please (1)

c0d3r (156687) | more than 7 years ago | (#17393020)

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 (1)

mustafap (452510) | more than 7 years ago | (#17393074)

You just posted to one :o)

Re:Web 2.0 Url Please (1)

c0d3r (156687) | more than 7 years ago | (#17393098)

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 (5, Informative)

Giometrix (932993) | more than 7 years ago | (#17393366)

"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 (1)

c0d3r (156687) | more than 7 years ago | (#17393530)

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 (1)

nuzak (959558) | more than 7 years ago | (#17393694)

> 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 (1)

budgenator (254554) | more than 7 years ago | (#17394392)

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 (4, Insightful)

The_Wilschon (782534) | more than 7 years ago | (#17393696)

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

You might try Tim O'Reilly's [oreillynet.com] 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 (1)

rainman_bc (735332) | more than 7 years ago | (#17394224)

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...

5 Web 2.0 URLs (2, Insightful)

neelm (691182) | more than 7 years ago | (#17393704)

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:Web 2.0 Url Please (1)

blugu64 (633729) | more than 7 years ago | (#17393364)

Wha?

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

tagging beta: yes (4, Informative)

mandelbr0t (1015855) | more than 7 years ago | (#17393032)

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 (1)

moore.dustin (942289) | more than 7 years ago | (#17393232)

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 (2, Interesting)

mandelbr0t (1015855) | more than 7 years ago | (#17393410)

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 (1)

moore.dustin (942289) | more than 7 years ago | (#17393596)

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 (1)

cakkafracle (969984) | more than 7 years ago | (#17394308)

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...

Re:tagging beta: yes (1)

inKubus (199753) | more than 7 years ago | (#17393510)

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 (0)

Anonymous Coward | more than 7 years ago | (#17393628)

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.

Irrelevant (2, Informative)

denoir (960304) | more than 7 years ago | (#17393062)

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 (3, Funny)

Citizen of Earth (569446) | more than 7 years ago | (#17393210)

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

Re:Irrelevant (0)

Anonymous Coward | more than 7 years ago | (#17393636)

linked [linuxtoday.com]

Was There Some Doubt? (0)

Anonymous Coward | more than 7 years ago | (#17393066)

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

Just ads!?#@! (3, Insightful)

recharged95 (782975) | more than 7 years ago | (#17393078)

"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!?#@! (1)

vertinox (846076) | more than 7 years ago | (#17393302)

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!?#@! (1)

Grant_Watson (312705) | more than 7 years ago | (#17393388)

Ads are like having prostitiution support your schools.

Am I the only one who missed the connection here?

Re:Just ads!?#@! (1)

AuMatar (183847) | more than 7 years ago | (#17393428)

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!?#@! (1)

RoChoy (1044618) | more than 7 years ago | (#17393780)

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

Re:Just ads!?#@! (0)

Anonymous Coward | more than 7 years ago | (#17394194)

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.

If you use NoScript plug-in... (0)

Anonymous Coward | more than 7 years ago | (#17393082)

...you know the answer.

Pretty much (2, Interesting)

TodMinuit (1026042) | more than 7 years ago | (#17393116)

I'm reminded of a Slashdot comment [slashdot.org] 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 (0, Redundant)

neoform (551705) | more than 7 years ago | (#17393120)

*crosses fingers*

What is this web 2.0? (0)

Anonymous Coward | more than 7 years ago | (#17393136)

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

I hope Web 2.0 is another bubble (1)

brokeninside (34168) | more than 7 years ago | (#17393138)

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 (1)

Citizen of Earth (569446) | more than 7 years ago | (#17393324)

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 (3, Insightful)

Euler (31942) | more than 7 years ago | (#17393834)

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.

Thats not true anymore (0)

Anonymous Coward | more than 7 years ago | (#17393722)

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.

So will there be a Web 3.0? (4, Funny)

TheWoozle (984500) | more than 7 years ago | (#17393148)

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

=P

Re:So will there be a Web 3.0? (1)

Frosty Piss (770223) | more than 7 years ago | (#17393458)

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

Re:So will there be a Web 3.0? (1)

joe_bruin (266648) | more than 7 years ago | (#17393464)

It shall be called Web.Net

Web 2.0 is almost evil. (0)

Anonymous Coward | more than 7 years ago | (#17393180)

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.

Clones or no clones, it's the insight into people (1)

i_ate_god (899684) | more than 7 years ago | (#17393248)

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...

Re:Clones or no clones, it's the insight into peop (0)

Anonymous Coward | more than 7 years ago | (#17394324)

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

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

To point out the person pointing out the obvious. (2, Insightful)

nick_davison (217681) | more than 7 years ago | (#17393252)

'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.

I, Dagres (0)

Anonymous Coward | more than 7 years ago | (#17393312)

but I Dagres...

web 2.0 (2, Insightful)

dheera (1003686) | more than 7 years ago | (#17393314)

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 (0)

Anonymous Coward | more than 7 years ago | (#17393584)

(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.

boredom (1)

Darth Cider (320236) | more than 7 years ago | (#17393344)

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 (1)

Ernesto Alvarez (750678) | more than 7 years ago | (#17393756)


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... (4, Funny)

UOZaphod (31190) | more than 7 years ago | (#17393374)

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 (1)

coldtone (98189) | more than 7 years ago | (#17393406)

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/ [cnn.com]
http://www.sitemeter.com/?a=stats&s=s26techcrunch& r=33 [sitemeter.com]

Audiences beg to differ (1)

bagsc (254194) | more than 7 years ago | (#17393412)

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...

Web 2.0 is... (1)

Ailure (853833) | more than 7 years ago | (#17393486)

A stupid marketing term.

Anyone knows where this term comes from?

Re:Web 2.0 is... (1)

nuzak (959558) | more than 7 years ago | (#17394218)

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

Yes, but.... (0)

Anonymous Coward | more than 7 years ago | (#17393528)

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 (4, Insightful)

LilBlackDemon (604917) | more than 7 years ago | (#17393600)

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 (1)

nevesis (970522) | more than 7 years ago | (#17394022)

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?

great! (1)

huckda (398277) | more than 7 years ago | (#17393700)

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!
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