A few days back, I wrote on how to avoid web 2.0 failures like Kiko. Today, let me discuss about the potential crash that Web 2.0 faces. Yesterday, Rob Hof wrote something in the BusinessWeekOnline.com about the real Web 2.0 bubble. Many people think that the mushrooming Web 2.0 companies are not exactly reminiscent of the dot com bubble that we saw in the late 90s that eventually burst as there are no IPOs so to speak of.



These days it is very easy to start a company and start earning right from the beginning through participation in the Google AdSense program. A Web 2.0 startup costs less than 30 times than it used to be during the first Web bubble hence, there is 30-fold increase in the competition they are facing.



John wonders how many startups can Google ads sustain. After all, there has to be a limit to the whole thing, isn’t it? Precisely that! There is certainly a limit. AdWords participants have a limit to the money they can spend through Google. Today, every Tom, Dick and Harry can set up a blog, participate in the AdSense program, and start earning. Actually, this is what is happening these days. This phenomenon is not only mushrooming, but also actually booming like anything one can imagine.



So if it was the crashing IPOs that burst the bubble in the 90s, it is bound to be Google ads this time. I can’t agree more with Rob here.