Andrew Orlowski produced an aggressive I-told-you-so article in Tuesday's Register, gleefully declaring the Web 2.0 bubble as burst. The trigger was a short piece in the FT titled: "Web 2.0 fails to produce cash."
As I have commented before, most of the $1.5bn VCs have thrown at Web 2.0 startups went into cutesy but useless Web services. Some went into infrastructure and enterprise services, but most of these didn't have defensible technology and were too easy to replicate, over and over (Backbase, Kapow are notable exceptions).
Even the services that attracted gazillions of users no longer look so valuable. The value of many kinds of ad space on the Web is dropping, and no one has more excess inventory than user-generated content sites. That's right, Twitter isn't going to sell for billions of dollars.
The 'good' thing about this popping bubble is that most of the money about to be written off comes from VCs (and only very indirectly from your pension) rather than retail investors, so the overall economic impact should be minimal (on everyone except the VCs).
The second positive side effect is that some of the key features hyped by Web 2.0, including tagging, sharing, the power of viral networks, mashup applications, instant communications and those ubiquitous lime-green logos are being rapidly subsumed into the general software and services markets. Every vendor claims to be Web 2.0 compliant and within a year or two every vendor will be. It's just not that hard.
[Pic credit: Lani Anglin]