Friday, November 18, 2005
Will the Bubble Burst or Give Birth to Web 2.0?
Building a Better Boom - New York Times
In a New York Times Op-Ed, John Battelle, "co-producer of the Web 2.0 conference" argues that the rising market in tech stocks is not a bubble about to burst. Instead he argues that we are moving from Web 1.0 to the next version of the internet Web 2.0. Battelle is convinced that all of this virtual economic activity is not a prelude another dot-com crash but the beginning of a new approach to online business:
In a New York Times Op-Ed, John Battelle, "co-producer of the Web 2.0 conference" argues that the rising market in tech stocks is not a bubble about to burst. Instead he argues that we are moving from Web 1.0 to the next version of the internet Web 2.0. Battelle is convinced that all of this virtual economic activity is not a prelude another dot-com crash but the beginning of a new approach to online business:
The Internet is exciting again, and once again folks are rushing in. In some categories - like search or social networking, for example - there are scores of start-ups vying for pretty much the same market, and it's certain that, just like last time, most of them will fail.The web has become a platform for all sorts of new services which can make use of the high speed, interactive, networking capacity of the web. This is where the growth will come from, web businesses do not necessarily require enormous sums to get started, which lowers the barrier to new investment. Look at the new online services he cites, search, sharing, social netwoking, music downloading. Are these kinds of companies going to be the foundation of a prosperous digital economy for the U.S.? Or, Are the the start-up costs so low is because they simply don't employee many people. Perhaps we will not have a market correction in the price of tech stocks in the near future. Let a thousand flowers bloom, feisty little start-ups with just a tiny bit of capital are the future of our economy. Battalle is hoping that sum of these ventures will add up to something, even if many will fail. Battalle could be right about the potential of the new business model of Web 2.0 services in the long run, but in the short term we may still have a bubble of tech enthusiasm ready to burst.
But regardless of all this deja vu, we are not in a bubble. Instead we are witnessing the Web's second coming, and it's even got a name, "Web 2.0" - although exactly what that moniker stands for is the topic of debate in the technology industry. For most it signifies a new way of starting and running companies - with less capital, more focus on the customer and a far more open business model when it comes to working with others. Archetypal Web 2.0 companies include Flickr, a photo sharing site; Bloglines, a blog reading service; and MySpace, a music and social networking site.
