Tech & Biz

The Web 2.0 economy hangs in limbo

by James Chutter | April 25, 2008 at 01:56 pm

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It was only a matter of time before the Web 2.0 community started to feel the burn of the US recession. This comes at a particularly bad time. as many newer Web 2.0 companies are still trying to figure out how to monetize their offering. Are we on the bubble of another burst?

The atmosphere was radically different during the day at Web 2.0 Expo, as talk of economic recession was unavoidable. TechWeb's Jennifer Pahlka, one of the expo's organizers, told attendees in a welcome address on Tuesday that she thanked them all for coming to the conference "in this time of budgets that are being scrutinized, and some bad headlines." Veteran entrepreneur Marc Andreessen was grilled in a keynote interview on his use of the term "nuclear winter" as a justification for his start-up Ning's new round of venture funding.

With investment banks going down and food prices going up, the gloomy economic forecasts have cast a dark cloud over cloud computing (and everything else getting talked about at Web 2.0). Yet tech companies like Apple, Google, and Amazon are posting healthy earnings, and despite talk of an advertising downturn, new digital-ad networks seem to be debuting by the day.

The economic attitude of the Web 2.0 Expo hangs in an awkward limbo: The tech industry relies on innovation, but no one can deny that these economic times demand caution. What's a geek to do?

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Jarrett Martineau

flagged this story as Good Stuff

at 14:04 on April 25th, 2008

"Are we on the bubble of another burst?" We are.

The industry needs to figure out how to make money on its offerings...and fast...before we're thrust head-first into a dire and real winter of Web 2 Point Oh No.

(Brrr...)

James Chutter

at 14:12 on April 25th, 2008

Well put Jarrett. It's crazy that Apple, Google and Amazon are still posting huge earnings but the slightly newer guys like Twitter, Facebook and Ning are still trying to figure this all out. Did they not learn anything from their fore fathers?

There's comfort in the fact that Google was bleeding money for years before they figured out how to monetize search.

Hmmmm and Brrr...