Friday, January 4, 2008

The Crash of 2008?


From today's "Good Morning Silicon Valley", courtesy of the San Jose Merc:

"I am only going to make one prediction, but one with broad impact. We will see a dot-com crash in 2008. It will be more prolonged and deeper than the crash of 2000. The crash will be driven by a recession and prolonged slow growth in the U.S. Global investment capital will flee to quality, ending the speculative dumping of cash on Web 2.0 startups. "Venture capital firms will seek to limit their losses by forcing many of their portfolio companies to liquidate or seek a buyout. ... Startups that managed to get cash before the bubble collapses will have a cash horde, but will find little opportunity to rest on it. ... The big players will not be immune from this contagion. Google, in particular, will find its one-trick pony lame, with the advertising market suddenly stagnant or contracting and substantial new competition. ... Google and Yahoo will find their available cash dropping and will do substantial layoffs." -- Entrepreneur and blogger Greg Linden gets in an early entry for this year's Cassandra Contest

What do YOU think? RSVP.

4 comments:

loucovey said...

Nothing is as bad as it seems. Nothing is as good as it can get. I won't say there won't be a dotcom crash next year because there are a lot of really weird companies out there with only one way of making money--advertising. But those companies can't compete with Google and Yahoo. There are other companies, not many but some, who have other revenue models including subscription and services. That's what real web 2.0 is all about. Real commerce with a purpose, not just advertising.

John Donovan said...

Very well said. I do see an ongoing oscillation between irrational exuberance and the inevitable agonizing reappraisal. Still, that Koolaid does have a tangy aftertaste...

Business plans, aye, there's the rub. Publishers want to be a conduit for selling stuff to their readers, which in the past has meant selling ads. If you're an information provider subscriptions don't seem to work, unless you're the Wall Street Journal, and even they're pulling back.

Providing and sponsoring services seems the way to go, but I'm yet to get my arms entirely around that.

Loring Wirbel said...

Please let social networks and similar Web 2.0 appliques be the first to go. At least Google and Yahoo can pretend to serve useful functions.

John Donovan said...

I'm with you. Get outa my Facebook! OK, I'll grant a special dispensation for YouTube so you can watch this video, courtesy of Gary Smith.