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27 December 2006



The Bubble is Going To Burst - Once Again!

In the beginning there was resistance, lots of resistance. Then after a couple of high profile sellouts their was panic, every speculator was going to be rich, quickly followed by the big bang. What a ride.What caused the last big bang is about to cause the next even the mainstream press can feel it. But this time the big balled investors are a little more cautious than before, yet it seems just as stupid. I recall one of the first bangers in a high profile sellout got 850 million UKP, valuing Lastminute on a par with W.H.SMITHs. This was for a little domain name that they picked up for 10 dollars, a couple of PHP coders, and a double page spread in the Daily Mail singing their praises. What a scam.After that everyone was hooked and they were all going to be rich. Overnight the internet changed from being a bit geeky, very innovative, and strictly non-commercial to one big supermarket with every vender spamming you with their latest rubbish.Of course it went pop, and when it did it was great. For all the commercial interests that were polluting cyberspace with their get rich quick spam, had had their balls crushed and in the aftermath we were left with a much quieter terrain where the speculators had been burnt and innovation could once again flourish.Don get me wrong I have nothing against making money but the nature of these speculators have a very negative impact on the general terrain of the internet and heres why. Firstly the vast majority of the venture capital investment that is injected into startups is used to not only prop up donkeys but more importantly is distorting the general playing field.This manifests in some very destructive ways. Noticeably, most of the real innovation that is at the core of the new functions that emerge online, is created by small groups of programmers / designers who tackle problems and create ingenues solutions which enrich our everyday lives. These are largely small groups of underfunded (if at all) individuals. Coupled with this parody is the power of the press, and Im not talking about the mainstream press I am referring to the new breed of Power-Ranger blogers who just like in the days of the specific industry related trade magazines are the current imbeciles of their time. So you have a small group of technology related Blogers who have managed to harness a captive audience but who are ignorant to programming, design, and largely technology for that matter but who have found themselves with the important title of chef bloger, and who make it their business to blog about what they consider is newsworthy or important.Just as with the old trade press journals you are left with a corporatised view on the world where the dinner table talk ranges from whos been fired to whos just managed to get VC to the tune of 568 million. Clearly this is the scope of the general table chatter and a brief look at Michael Arrington Techcrunch you will see the same old traditional trade journal style of so-called news (hysteria) being covered. But burred by these trade like journals is the real startup discussion. The real news is not in whos about to loose 586 Million because they have invested it into a pile of donkey shit but rather whats happening on the ground.The innovative ground floor is once again being crushed by an ambitious bunch of ignorant money grabbing speculators who in their hysteria do not know the value of a domain name let alone an online travel agent. This is not to say that innovation will stop or the current wave of Web2.0 startups wont flourish as some will, but the survivors of the next big bang wont be the those empty black holes who are being jacked up by VC, instead they will be the the low profile (unfunded) innovators who continue at their own pace despite the noise of whats supposed to be hot, in the race to be a me-too copycat company.


interesting point of view but i can t agree with. in a growing industries there will always be copycat, and a lot of crashes on the way. so what? does this make it a bubble? is that what is going to cause the internet industry to crash? i seriously doubt so. The true risk may come however from the fundamentals of this industry. If for some reason the advertising market was not growing anymore or even collapse, if click fraud would become dominent, if Google/Amazon/eBay stock would crash, then there would be a risk a destabilisation of the whole industry for VCs, entrepreneurs and employees.

Until this happens i would be happy that people stop talking about bubble with really defining it or precising what would be the true reasons of that phenomemon. like the word "web2.0" this empty expression of "bubble" starts to make me nervous....

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