Kool-aid rules the Deluge
Steve Rubel has some pertinent views on the whole Web 2.0 bubble and the crazy valuations and hype being bandied around right now. Last week's Google strike on the company's advertising competitors -- which may have put a lot of small internet operators out of business -- illustrates how quickly the weather can change. Rubel doesn't beat about the bush, "This is a sad time for the web. It's as almost somber as the time just before the last bubble burst in 2000. I was working in PR with dot-com startups at the time and the way I feel now is how I did back then." Regular readers of Syntagma will recognize the sentiments he expresses, especially in this passage, "... over the last year my thinking has evolved dramatically. I have become less interested in every new shiny object and more engrossed in the social changes it, slowly, effects. This is in part a byproduct of the tech blogosphere getting drunk on its own Kool-Aid." No more first fine careless rapture then. The picture of the internet I see right now is of steady progress, both in the underlying technologies and also the growing professionalism of many quietly working away under its wing. Overarching all that is the froth and hyperactivity of a new bubble-in-the-making. From the outside, however, only the nonsense is visible. People are being sucked in with promises, only to be swept aside as technical parameters are changed without notice and the marshals overwhelmed by the cowboys and injuns. It really is a Wild West out there. That the fundamentals are gradually being put in place is great news for those of us who retain our enthusiasm for the web and will continue to use it as the base for professional and commercial activities. Are we then approaching another collapse in internet values? We are not immune from the wider economy : * Oil is nearly $100 a barrel * Gold is approaching $1000 an ounce * Housing markets in the US, Britain and Europe are heading south * Stockmarkets are wobbling tortuously * The credit crunch has yet to peak * Inter-bank lending is at a standstill * Inflation is ominously poised for a comeback. These are all strong indicators of trouble ahead for everyone. I've long believed that it's a mistake to follow the crowd. The herd will always produce a glut in the end and the subsequent fall in values will put most out of business. It's only those who dig their own distinctive furrows and apply basic cash-flow techniques in the time-honoured manner who will survive the deluge. And "deluge" seems the only appropriate term for the time ahead.
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