the beginning of the end, again?
I wouldn’t call myself a pessimist. I’m a bit more of a realist, on the optimistic end of the spectrum. If you can figure out what that means, good for you!
All good things do come to an end… particularly when they’re named something as finite as Web 2.0. Even moreso when such a term is so buzz-y that whole magazines and conferences and business models are designed around its loosely defined description.
Crunchgear asserts that the end is nigh. Two factors are contributing to this: Laziness and Advertising.
Laziness
Seth says #1 is laziness. I’d tend to agree. I don’t believe I’ve ever rated anything (products, restaurants, etc) online. Because I’m lazy. Sure, I’ll read other people’s reviews, but as Jason Calacanis demonstrated with Netscape (R.I.P.), 90% of the content is generated by 1% of the users, and the best way to motivate them is to pay them! And in the end, it’s not user-generated, but editorial, and we’re back where we started.
Advertising
Seth didn’t say this, but I am: If Web 2.0 is built on anything, it’s pageviews and advertising. All the free services out there have to make money somehow, and that “how” is advertising. A lot of the silly user-generated content sites that slap a little adwords on the side are going to suffer and eventually shutter because #1 leads to fewer pageviews, which leads to lower ad revenue. Combine that with the impending tightness on ad dollars, and you’ve got something akin to California, circa 1850.
Facebook may be where the eyeballs are, but they’re going to have a really tough time paying off that $10bn valuation if pageviews drop and ad revenue gets tight, especially if people are too lazy to update their status and fend off pirates.
Even though we’re only on the second round, I’d say this is a cycle. At a 30,000 foot level, it looks similar to the last go-around. Lots of people go crazy building stuff that does nothing, generating absurd valuations that shift from company to company in M&A’s (the new IPO). In the next year we’ll see lots of companies slough off because of #’s 1 and 2 above, and because they give no real value to anyone.
The Web 2.0 companies that will remain are those that actually provide something to the end user. eBay is still around from bubble 1.0, even though they survived without a redesign until recently (more of a new stylesheet than a redesign). Priceline.com, Stamps.com and WebMD all survived. Craigslist will be fine because people need stuff like apartments, used couches, and anonymous sex. Should we take bets on who survives?