Back to Tech Blog homepage
Balancing out the Web 2.0 euphoria
October 17, 2007
The 3,000 or so people who packed into the ballroom of the Palace Hotel in San Francisco this afternoon to hear Mark Zuckerberg at the start of the Web 2.0 Summit (see note below) were treated to a vintage performance from the Facebook founder. And I chose that word carefully: he may be just 23, but Zuckerberg has already mastered the art, vital for the CEO of any company that has whipped up such a firestorm of interest, of saying precisely nothing.
The nothings about which Zuckerberg’s silence spoke volumes included whether he is going to sell an investment stake to Microsoft and whether he is going to build an advertising system to rival Google’s AdWords/ AdSense. The one telling moment came at the end, when Zuck was asked whether it wasn’t time for Facebook to hire a little "adult supervision" in the shape of a more experienced CEO. The young internet tycoon visibly bristled. It was as though someone had asked the young Bill Gates (and fellow Harvard drop-out) the same question in the early days of Microsoft. Clearly, unless things start to go badly wrong, Zuckerberg is going to see this through to the end.
Meanwhile, it was left to an older hand, Mike Moritz of Sequoia Capital (that’s his picture above,) to try to pour a little cold water on all the internet euphoria that was bubbling up in the room. Some choice quotes from the venture capitalist who was an early investor in Yahoo and Google:
About a possible cyclical slow-down in internet advertising: "This year clearly there is a softening in consumer spending and the Web companies are not immune from that. They are of a size that they aren’t immune from general industry trends."
About the risk that another internet bubble is being inflated: "Undoubtedly there’ll be carnage… But there will also be a handful of companies that emerge to become very significant companies."
And, most chilling of all for the Web 2.0 acolytes packing the hall, a reminder that Chinese internet companies like Baidu and TenCent are growing like weeds: "Are the US companies any longer as relevant as they used to be?"
Its as if the industry has no memory of the bubble. Does Facebook have a business model? What is the plan to monetize the website. The only internet advertising play in the industry that has a proven business model is Google. Google, with its contextual search provides a clear value proposition to advertisers.
The question these starry eyed attendants of the web 2.0 conference should be asking, is what exactly is web 2.0 — hype or reality.
Haven’t we seen this movie before.
Sam Miller
Posted by: Sam Miller | October 19th, 2007 at 2:28 am | Report this commentwww.walkersresearch.com
Walker’s Research - a quality source of business information