A recent article posted at News.com talks about the deep interest that scores of investors have in social-networking web sites. There’s no doubt why there is such interest – many of these sites have proven to be extremely successful and experience continuous growth and support from venture firms. Facebook is one such example with a “year-over-year growth of 129 percent.” As they become successful, these social networking sites begin toying with the idea of an IPO as Classmates.com is currently doing, along with LinkedIn. While an IPO for any business signifies a certain level of prestige and provides capital for these companies to continue growing, it should be done when the time is right.
The problem that we saw during the dot-com bubble in the late 90’s was that companies sought after an IPO much too quickly which eventually resulted in the dot-com bubble burst. I’m certainly no expert, in fact, I’m far from it. But, I don’t think it takes an expert to see that at some point, we’ll see the Web 2.0 Bubble Burst. Venture Capitalists are forking out money left and right to companies that have a copy-cat idea. Very few of these companies will be able to stick around for the long-haul.
With all of the duplicate Web 2.0 sites, including all of the social networks who are seeking after an IPO or acquisition to cash-in big, it’ll only be a matter of time before the big burst. Those who take it slowly and wait it out will ultimately be those that land themselves on top as Google did when they held out offering an IPO until after the Dot-Com bust. Their IPO was extremely successful which is attributed to the fact that they waited for the perfect moment.
New Poll: When will the Web 2.0 Bubble Burst?
This leads us to our new poll: When will the Web 2.0 Bubble Burst? Go ahead and vote in the sidebar to the right.
It’ll burst…
- By the end of 2007
- Within a year
- Within 3 years
- In more than 3 years
- A bubble burst is not likely to occur
Source: Thanks for the tip Curtiss!
I would say within a year, but it seems like this time around it’s a bit better off than back then (during the turn of the century).
I agree that it seems better this time around, but I am still convinced it will happen within the next 2-3 years.
I think it’ll break down very gradually and slowly.
All in all, sites like Myspace and Facebook will probably be dead within a year….but other bits of Web 2.0 like blogs and commenting probably won’t be dead for a long, long time.
Um, I don’t think we are in a bubble … at least not like the dot calm days when everyone had IPO’d … if you consider increased VC capital a bubble then …
The problem I see is that we are going to enter disillusionment as to what Social Networks can do … But just as a note, Social Networks are akin to Forums in the 90’s and most sites I visit have some sort of forum to participate in … they won’t be going anywhere …
I really can’t believe people think Facebook will be dead in a year, MySpace sure but I use Facebook to keep in touch with friends / share pictures with friends in a convenient way … I will continue to use it until all of my friends switch to something else which i don’t think is likely …
By the sheer volume of new social networking sites, emerging day by day, i would say within a year, most likely by mid 2008.
I don’t think MySpace and Facebook will be dead anytime soon. Their market base is way too large and MySpace is already owned by a larger parent company.
I’ve often thought that we aren’t in a bubble right now as well, but there are too many new sites popping up and trying the “get rich quick” scheme. Everyone wants to be acquired, and sites are popping up faster than Google, Yahoo!, and Microsoft can open their pocket books. Somethings gotta give.
I think that’s a bit soon…I would say within 3 years.