Is this new Web 2.0 goldrush another bubble in the making or is it merely frothy? That's been the talk of Silicon Valley for a while now, and the chatter only got a little louder after Google slapped down $1.65 billion of its stock to buy YouTube.
I remember the last crash. I was in San Francisco for the Webby's just months after the bubble burst, and I remember a young programmer holding a sign: Will Code for Food. In a year, it went from a venture capital fuelled frenzy to one of the deepest troughs the Valley had seen. It wasn't just the dot.com crash, big chip makers AMD and Intel also saw one of the deepest slumps since the mid-1980s as companies cut back spending on technology after replacing their gear for Y2K and server sales plummetted. The Valley is about booms and busts, and the serial start-up artists consider it just part of the cost of doing business. They all know the risks and assume that they might go through ten start-ups before hitting gold.
The big question now is whether another bubble is about to burst or if there even is such a thing as the Web 2.0 bubble. (Some of you may be asking what the hell Web 2.0 is. Here's an answer.) Tech columnist turned citizen journalism advocate Dan Gillmor definitely thinks it's another bubble and casts a gaze back to boom-time of the 1990s. But Tristan Louis takes a look at the numbers and shows how the YouTube acquisition is the exception not the rule. Umair at BubbleGeneration takes a hard look at the whys of the deal and whether it's worth "10-20x today's revenues". If you want to carry on the discussion with Umair, his weekly Innovation Wednesday is tonight in Marylebone if you want to discuss offline.
For those of you with a Web 2.0 business looking to get out while the getting is good, here's the exit.
