It is very difficult to find a highly profitable Web 2.0 company. However, money seems to be flowing in like never before into Web 2.0. According to Dow Jones VentureOne, this year there had been 49 financial funding amounting to $262.3 million in total. Last year there were 51 deals totaling $199.1 million. Then, last year in July Rupert Murdoch News Corp bought MySpace for $580 million dollars that many pundits still think was a very bad deal.
So is this hype and the awesome PR that Web 2.0 got in the last 20 months or so that is pulling the money towards it? Or is it the PR Web 2.0 deals are getting is actually making it look bigger than it really is. We must not forget that Web 2.0 financings are still a miniscule part of overall VC funding, which amounted to around $13 billion.
Now Yahoo! is eyeing Facebook for a billion dollars and YouTube is saying that it is worth $1.6 billion at least. On what basis may I ask?
As I have said before, there are finites in the Online Ad Biosphere in which Google Ecosystem is just a part. I might be missing something here, but at this moment I would still keep the Web 2.0 thingy under the ‘Bubble’ category.
