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December 17, 2006

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» Its About Time from Darren Herman
If youre an avid reader of the Web 2.0 blogosphere, youre probably sick of reading about the response to Time Magazines Person of the Year you. I was debating whether or not to write about about this article as I wanted to a... [Read More]

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At TiECON East , Friday, May 30th Fred Wilson and I will be debating Web 2.0: Viable Business [Read More]

Comments

Rhea

So, it really is all about me. I mean, us.

Paul Fabretti

One thing everyone should remember is that there are very few companies who can survive successfully and profitably on the internet alone - that was Web 1.0's mistake.

Web 2.0's mistake will be thinking that making communities-alone or UGC will make them money...it won't. We are dealing with some of the most fickle consumer-groups around, how can you rely on ANYTHING with that kind of customer-base?

As soon as web 2.0 became mainstream, we needed to be picking faults with it to see where it will lead us next.

What will kids do when they get sick of passing messages to each other...or am I wrong...will they EVER get sick of passing message to each other?

Dr. Pete

I completely agree with you on (2) and (5). Yes, it's cheaper to launch a Web 2.0 start-up, but that doesn't mean the people doing it are any smarter. Filling an empty web-page with AdSense links isn't a business model, IMO.

I'm also concerned about where the VC is going to go. At least here in Chicago, the capital is becoming more available, but the smart start-ups don't want it. They're all looking for angel investors, which makes me think that the big VC is going to push for large, high-risk ventures, creating demand for the same kind of companies that caused the first dotCom bust.

Chris D

@Paul,

"What will kids do when they get sick of passing messages to each other...or am I wrong...will they EVER get sick of passing message to each other?"

Kids will indeed never get sick of passing messages to each other. For FREE, that is. However once any large acquirer of a name-brand community site starts to monetize, either though "pay-per-play" or advertising, the end-users will immediately migrate to another FREE service that is being subsidized with VC money.

It'll be interesting to see what will happen to Skype (eBay) usage once they roll out their monetization plans of charging $30/year fee. While $30 is cheap and still offers a lot of value for consumers, there is a infinite gulf in consumer's (particularly young) minds between low-cost and FREE.

So, @Dr. Pete, that is where VC's big money will be ultimately put to use: not in product development (cheap to build product), but rather subsidizing FREE usage to build up a user base, to then sell to a deep pocketed acquirer. That strategy worked wonders for YouTube/Sequoia.

PTC

I agree with the point of 'whos gonna get hurt' but the change of responsibility placement on right shoulders, per se, reduces the chances of burst. This time, the entities whos gonna get hurt in case of burst are VCs and Big players. We can certainly expect careful moves from them (as compared to crowd following individual investors during DotCom).

A comprehensive analysis of Web 2.0 at http://www.techbiz.blog.com

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