tag:blogger.com,1999:blog-6569681.post4517180410791528113..comments2024-01-15T13:17:33.771-08:00Comments on Geeking with Greg: The coming 2008 dot-com crashGreg Lindenhttp://www.blogger.com/profile/09216403000599463072noreply@blogger.comBlogger50125tag:blogger.com,1999:blog-6569681.post-10546569606929838302009-09-17T14:27:23.309-07:002009-09-17T14:27:23.309-07:00Greg, I do not think it was the dot-com bust as yo...Greg, I do not think it was the dot-com bust as you predicted. <br /><br />Had you said that the US economy will suffer and as a result will take down web companies I would have agreed. <br /><br />I read your post today and a lot has happened since then but it was always clear from second half of 2008 that the sub-prime crisis and resultant credit crunch would affect most industries.<br /><br />The start-up costs in these days are very low compared to what they were in 1999-2000 and I would assume that the VCs would have smartened up from 2000 experience to do some due diligence before investing in any company. I know back in 2000, any dude could come up with any idea and people would be suckers for it.<br /> <br />One good thing that the 2000 did to tech is it established internet infrastructure from which we are benefiting now. I believe there are still a lot of opportunities out there for web companies.<br /><br />Facebook actually became profitable during the great recession.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-44903720369401021052009-01-08T08:27:00.000-08:002009-01-08T08:27:00.000-08:00Certainly not happy, no. Unfortunately, it does l...Certainly not happy, no. Unfortunately, it does look like the prediction was mostly correct.<BR/><BR/>Google has done <A HREF="http://searchengineland.com/google-confirms-layoffs-of-contract-employees-16043" REL="nofollow">substantial layoffs</A> of contractors, so I think that part of the prediction was accurate too.<BR/><BR/>There are some other parts of it, such as a steep decline in venture capital and online advertising, that are still playing out into 2009, so it might have been not entirely correct to predict that all of this would happen in 2008. It's awfully hard to get the timing right on these kinds of things.Greg Lindenhttps://www.blogger.com/profile/09216403000599463072noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-61760770333477288972009-01-08T08:20:00.000-08:002009-01-08T08:20:00.000-08:00Must make you feel, while disheartened at the stat...Must make you feel, while disheartened at the state of the economy, just a little bit happy to have silenced all of your critics on this post. Looks like you were dead on, save the Google layoffs.Talent_Brokerhttps://www.blogger.com/profile/11716200674626114364noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-80769953844629950522008-10-22T13:09:00.000-07:002008-10-22T13:09:00.000-07:00Reality and fiction meet once again?Good job on th...Reality and fiction meet once again?<BR/><BR/>Good job on that one.Christopherhttps://www.blogger.com/profile/16423688899751559332noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-11168987293688032442008-02-11T00:44:00.000-08:002008-02-11T00:44:00.000-08:00You're rihgt on this one. Only I think its going ...You're rihgt on this one. Only I think its going to be worse-- we're not facing a recession, we're facing a depression, and the USD will lose %50 of its value very quickly, along with massive structural problems in this country which will quickly become a global phenomena. <BR/><BR/>We're going to quite literally get served teh bill we've been putting off since 1915.<BR/><BR/>And of course, as in the last depression, the politicians will print money like crazy and try to "solve it" and in the process make it deeper and worse (and cause the USD to drop probably another %50 over the next 4 years.)<BR/><BR/>A $100,000 car will be relatively cheap well before 2015, but nobody will be able to afford it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-48308272533165587402008-01-22T16:48:00.000-08:002008-01-22T16:48:00.000-08:00I wasn't "in" the last dotcom crash, so I can't re...I wasn't "in" the last dotcom crash, so I can't really draw a lot of parallels or differences, but, it seems like the scenario this time around is a heck of a lot different. I agree there are a lot of startup's out there that neither have a strong technology foundation nor a solid, long-term, recession-safe revenue model. But, at the same time, it seems like many of the big players that are big now, endured the last one when they were more "startup-ish" and shouldn't have much problem this time around. That said, "getting affected" by the slowdown is a very relative term. If google was "affected" then, it would very well have meant the end for them, but, now, if it is "affected^10" it will probably cause a few lay-off's and loss of "glow"... but, will continue to be around. I guess slowdowns might be a part of the "company sobering" process?<BR/><BR/>On a slightly sepaarte note, I am kinda puzzled by the sequence of events in this recession, as compared to the previous. For one, in the last while the recession in the economy led to the crash of the housing market (and the subsequent "super-inflation" from '00 to '05), this one seems to have been initiated by the crappy housing market. The tech sector on the other hand, isn't as inflated (in terms of stock) prices as it was in the last dotcom bust.Anilhttps://www.blogger.com/profile/03111841636197471062noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-26292387547515061162008-01-18T05:41:00.000-08:002008-01-18T05:41:00.000-08:00"Even so, he is not the only one to worry about so..."Even so, he is not the only one to worry about so much of Web 2.0 resting on the foundation of Google AdSense. That platform will not continue to pay out forever; it will not continue to grow forever."<BR/><BR/>This is a very important point in my opinion. The people saying plenty of web2.0 startups are making profit - where is that profit coming from besides advertising?<BR/><BR/>I'm quite interested in the microcosm that is the facebook bubble to be honest :) That should be interesting to watch.Davehttps://www.blogger.com/profile/09454202607949839421noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-12117550744758344162008-01-14T23:57:00.000-08:002008-01-14T23:57:00.000-08:00There will be no dot-com crash in 2008, because th...There will be no dot-com crash in 2008, because the web 2.0 revolution is still growing. Plenty of profits are being made. The web 2.0 economy is growing, but people outside the industry just don't know that. Web applications have grown very powerful and complex. People who left web in 2000 to jump on the real-estate band wagon can't get back to web. The learning curve is much to high to catch up. The web 2.0 engineers who stuck with tech through good times and bad find their salaries rising higher and higher because their skill have "evolved" to a higher more advanced plane. I am proud to be a web head and my ever increasting salary proves it. If you've stayed with tech you are in for a big treat. Your salary will go up and housing is going to crash. You'll be a home owner before you know it, buying a million dollar home in the bay area for $300k. WOOT. PEACE OUT. -Anonymous Web DeveloperAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-59470402119775476312008-01-11T12:33:00.000-08:002008-01-11T12:33:00.000-08:00Well, considering the outcome of your 2006 predict...Well, considering the outcome of your 2006 predictions, I am not sure why would want to take another stab at this... I mean, controversy and related web buzz aside. <BR/><BR/>I think most Web 2.0 companies and VC remember the crash of 2000 and learned much from it which has prevented the same mistakes.<BR/><BR/>I seriously doubt that we will see a crash in 2008, and even more I am very confident that it would not be worse than the one in 2000.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-18242315279656901482008-01-07T13:16:00.000-08:002008-01-07T13:16:00.000-08:00This comment has been removed by the author.Socrateeshttps://www.blogger.com/profile/13283208907529241302noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-69188419936988330642008-01-07T03:20:00.000-08:002008-01-07T03:20:00.000-08:00will there be a widespread crash which engulfs goo...will there be a widespread crash which engulfs google as well? probably not. as "lame" as their "one trick pony" might be, google's ad engine is so much more effective than print advertising that dollars will continue to flow there. <BR/><BR/>i recently ran a test for www.opinionsource.com on google adwords using both online keywords and google's new print ad option. the print ad was 3x more expensive and yielded no results. the online keywords continue to be very effective. <BR/><BR/>in terms of startups, the main palyers who are vulnerable are the vc's, not the startups. why?<BR/><BR/>it costs less and less money every day to launch a net startup. lots of companies are starting up with a few 100K. <BR/><BR/>when you run a vc you want to raise bigger and bigger funds to put more money to work and have more fees. but that does not work in the land of cheap startups. <BR/><BR/>moreover, lots of successful entrepreneurs are now funding startups directly, supplanting the vc's in some cases. <BR/><BR/>vc's will have to get a lot more active in seeking out entrepreneurs beyond the few hundred people who keep cycling through many of the startups. <BR/><BR/>if they succeed it will be good for innovation. if not, it will be a tough time to be sitting there with lots of capital and nowhere to invest it wisely.Marathonershttps://www.blogger.com/profile/03131424024064814158noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-41432850433312522452008-01-06T12:14:00.000-08:002008-01-06T12:14:00.000-08:00I don't agree.Bubble 2.0 will burst, but the funda...I don't agree.<BR/><BR/>Bubble 2.0 will burst, but the fundamentals are much, much different this time around: customer behavior, ad spending, shift of off-line spending, broadband penetration, AJAX/Flash capabilities for better user experiences, video adoption, etc.<BR/><BR/>Also, more of the entrepreneurial action is happening outside of traditional VC.payne92https://www.blogger.com/profile/08407980928694481477noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-14717361337153918012008-01-05T11:34:00.000-08:002008-01-05T11:34:00.000-08:00Maybe web2.0 will die, but comes web3.0.Oh, I am n...<I>Maybe web2.0 will die, but comes web3.0.</I><BR/><BR/>Oh, I am not denying that. I certainly believe that these things are cyclic. I was only saying that Greg's predictions, for Web 2.0, do not sound as outlandish as some of the other commenters were claiming. <BR/><BR/><I>Are there other avenues? Of course.</I><BR/><BR/>So, what other avenues? Subscriptions? I thought one of the principal foundations of Web 2.0 was that people are unwilling to fork over real cash for their online services. Will that change? Will the age-old, elusive dream of micropayments finally catch on?<BR/><BR/><I>I think "whether Google's Ads model will burst" might make a more interesting topic.</I><BR/><BR/>By "whether Google's ad model will burst", do you mean really burst? As in, fall apart? Or do you just mean stagnate/flatten/slow down? Yes, that would be an interesting discussion to have.<BR/><BR/><I>Searching google isn't saving ppl time these days...Have you noticed the same of yourself?</I><BR/><BR/>I think I have a different online searching behavior than most people. That should be the thread of another entire discussion, also.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-65519277210058537792008-01-05T05:10:00.000-08:002008-01-05T05:10:00.000-08:00Jeremy: Maybe web2.0 will die, but comes web3.0. ...Jeremy: Maybe web2.0 will die, but comes web3.0. Supply and demand. The many new eyeballs around the world sprouting from every new born that comes on the Internet each and every other year does not depend on advertising dollars.<BR/><BR/>With only 5% of adsense users making more than $500/mth, and PPC going higher than a dollar, new ventures may have to look at alternatives other than Google Adwords to stick their heads above the crowd. Are there other avenues? Of course. Just not as silly as throwing thousands of adwords dollars and seeing dust.<BR/><BR/>I think "whether Google's Ads model will burst" might make a more interesting topic. Searching google isn't saving ppl time these days. I go to user-generated bookmarks and get what I'm looking for faster and with more quality compared with what I get from Google. Have you noticed the same of yourself?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-47077225134938117272008-01-05T04:50:00.000-08:002008-01-05T04:50:00.000-08:00I'm from and in Singapore reading this and do appr...I'm from and in Singapore reading this and do appreciate both side of the views. I raised a few mil back in 1999 and our startup did not even crawl out of R&D when it hit. After a few years of personal difficulties, I'm up again on another startup that's about to launch its beta. The difference now is, I only needed less than 1/10th to get things up as compared to y2k. Back then, nobody expected user-generated contents to be what they are today amongst other things. Many things about the future of the web was based on even more predictions that was not based much on anything other than gut-feel. Ppl invested almost blindly seeing the early ones went public. Warren Buffet did not touch a bit of all these. Many techies also jumped in as fast as they jumped out of the bandwagon when they figured the wheels are wearing out.<BR/><BR/>Bubbles are always founded upon an aggregate of hyped up predictions. <BR/><BR/>If innovation is dead, the need to market anything will be dead, and so along with any form of advertising. New innovations has made possible how ppl communicate today. Blogging, socializing the way we are now are lightyears ahead of y2k and will continue to be. Internet spending habits are growing as well.<BR/><BR/>So I think there will be a correction but ppl today are more realistic and wiser with what to expect of internet startups.<BR/><BR/>Unless there is a real bubble, then there is something to burst. Yet another social network coming up is not a bubble. Many of these serve their micro purpose. Those that don't simply close up and I bet none of us here even get to hear of it at all.<BR/><BR/>Bros, innovation was probably the best invention of time itself beside beer. If there is a burst, good too. It shall breed even better startups in a couple of year's time. The internet is brutal enough as it is today. It'll take a world war to burst and crash the internet. Consider this as well, the US alone is just part of the Internet, not THE internet.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-42904540542453123812008-01-05T02:14:00.000-08:002008-01-05T02:14:00.000-08:00The reason this will not happen is the first law o...The reason this will not happen is the first law of bubbles - they are only clear in hindsight. This time, warnings of "bubbles" are everywhere. There is already too much fear and uncertainty in the markets for this to play out. 2000 was very different. There was widespread, unqualified bullishness and optimism about tech and the economy everywhere and if someone had put up a post like yours then, they would have been vilified and attacked far more. At the moment, almost everyone thinks there will be a US recession, the markets are extremely jittery and the stock market is not overvalued by any reasonable metric - unlike 2000 when the S&P 500 was trading at a PE of 30, double what it is today.<BR/><BR/>So there won't be a crash. There MIGHT be a US recession. But as someone has pointed out, companies like Google now get 50% or more of their revenues from outside the US anyway. The bottom line is all the things you mention are already "in the price".<BR/><BR/>This doesn't mean we will not see a flushing out of over optimistic web-2.0 type startups whose key proposition is an impressive slogan but in the wider context that would neither be unfortunate or particularly traumatic for the sector.Piyush Panthttps://www.blogger.com/profile/00451123882586770869noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-33358613175578255522008-01-04T23:46:00.000-08:002008-01-04T23:46:00.000-08:00I *highly* doubt that a Web 2.0 bubble/crash, if i...I *highly* doubt that a Web 2.0 bubble/crash, if it occurs, will be similar but deeper than 2000.<BR/><BR/>The shear amount of money invested in 2000, as well as well as the size of the start-up's that failed, are so much larger than they are today.<BR/><BR/>Start-up's today are very much aware of what happened in 2000, spending money much more wisely, as the $ in starting a start-up goes a lot further due to open source, etc...<BR/><BR/>The recession of 2008, if it happens (two consecutive quarters of decreased GDP), will be due to the housing downturn and credit crunch, not a speculative NASDAQ bubble based on your mom & pop investing in IPO's in companies that they heard as a stock tip but had no idea what the company did.<BR/><BR/>Many web 2.0 start-ups will and should fail. Most start-ups, by definition, will fail. But a web 2.0 downturn will be a lot more gradual than 1.0, IMHO.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-3548610582114199972008-01-04T23:27:00.000-08:002008-01-04T23:27:00.000-08:00No crash in sight, business automation is one of t...No crash in sight, business automation is one of the very few investments with short-term ROI, and that is really what Web 2.0 is about. The original bubble bursting was the market punishing tech, far more than tech companies failing to create markets. The attacks are always against the companies that spent money like it was water, and had nothing to sell. Irrational exuberance in the market was to blame for this, not the vision that the web could be the next gold rush. The market turning on the tech companies lead us into a tech dark age, where MicroSoft cemented their position, and product quality was at an all-time low, (everyone will use Internet Explorer, and we won't fix any exploitable security holes ever). This is the same noise that has hounded Google and the web for the last 8 years. Google's all time high stock price will be in the third quarter of 2007, RedHat will make money, VCs will continue to try to throw money at start-ups they can't understand, and lots of them will go under. Nothing more to see here, move along.total-conversionhttps://www.blogger.com/profile/18045254055748130824noreply@blogger.comtag:blogger.com,1999:blog-6569681.post-18403417994418026112008-01-04T22:39:00.000-08:002008-01-04T22:39:00.000-08:00This is exactly the scenario the more sober busine...This is exactly the scenario the more sober business minded folks are predicting. VCs are telling their companies to hold off hiring for Q1 as labor will be MUCH cheaper once the magnitude of the crash becomes evident. Many small companies are drooling over the coming fire sale of assets that they can scoop up rather than build. 2 dot 0, the end is near...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-49062671911782087212008-01-04T21:12:00.000-08:002008-01-04T21:12:00.000-08:00Ballzy call and unfortunately you may be exactly r...Ballzy call and unfortunately you may be exactly right.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-59931412443677060152008-01-04T20:50:00.000-08:002008-01-04T20:50:00.000-08:00I doubt it will be worse but I can't see how tech ...I doubt it will be worse but I can't see how tech will weather the coming recession. Today's action in the high beta Nasdaq companies was very telling of whats to come for all tech companies especially the tiny startup with a few bucks in venture capital. The way dumb money has been thrown at dumb companies over the last few years definitely reminds me of what we saw leading up to 2000. <BR/>Just short all the mo mo tech stocks (and Chinese stocks) that tripled and quadrupled over the past 2 year sand you will weather the storm just fine :-) Cheers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-9354281141754310192008-01-04T19:53:00.000-08:002008-01-04T19:53:00.000-08:00No one can predict the future. Humans suffer from ...No one can predict the future. Humans suffer from a "prediction addiction". Even if you get it right, it's by change. Predicting doom is pretty easy since being wrong is to the benefit of others. <BR/><BR/>Odds shouldn't be confused with knowledge or experience. ~ Mr. ShepardAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-78048003233095579212008-01-04T17:22:00.000-08:002008-01-04T17:22:00.000-08:00Guys, this is a JOKE! Read carefully: "Google, in ...Guys, this is a JOKE! Read carefully: "Google, in particular, will find its one-trick pony lame, with the advertising market suddenly stagnant or contracting and substantial new competition."<BR/><BR/>This is a joke. I don't quite understand why someone would post something that sounds more like a April 1st joke in January, but who knows, this could be some kind of weird tradition we all don't yet know! ;)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-5065148066525531532008-01-04T15:56:00.000-08:002008-01-04T15:56:00.000-08:00By the way, Kevin Lee discusses both sides of the ...By the way, Kevin Lee discusses both sides of the PPC ad recession argument <BR/><A HREF="http://www.clickz.com/showPage.html?page=3626757" REL="nofollow">here.</A>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6569681.post-402224264769681572008-01-04T15:50:00.000-08:002008-01-04T15:50:00.000-08:00Daniel: What Greg is predicting is that the whole ...Daniel: <I>What Greg is predicting is that the whole Web 2.0 industry will collapse because the advertising dollars and the VC funding will dry up.</I><BR/><BR/>I don't think this is exactly what Greg is predicting. The collapse, yes. But did he say that the "advertising dollars will dry up"? No. To be exact, Greg said:<BR/><BR/><I>Google, in particular, will find its one-trick pony lame, with the advertising market suddenly stagnant or contracting and substantial new competition. The desperate competition with dwindling opportunity will drive profits in online advertising to near zero.</I><BR/><BR/>So Greg isn't talking about "drying up" (disappearing) so much as he is talking about "stagnating". Meaning: Not advancing or developing. Advertisers will still exist. There just won't be the kind of growth we've seen. Things will flatten. Or if they don't flatten, increased competition will squeeze profit margins to near zero, and profits will flatten. <BR/><BR/>Not dry up. But flatten. No more growth. <BR/><BR/>And when advertising stagnates, and profits flatten, then people start to look around and say, "Now, why are we valuing Google at $150 billion? When they are only making $6 billion every year?" <BR/><BR/>That $150bn valuation was predicated on a continued growth market in advertising. As long as Goog's ad revenue increases, the Goog's valuation remains high. (My numbers may not be exactly correct, but they are ballpark-appropriate to the point.)<BR/><BR/>Now all that has to happen is for advertising to stagnate for three quarters in a row. Not "dry up", but stagnate. Once that happens, Google's valuation drops from $150bn to (let's say) $15bn. Google won't become completely worthless, because they'll still be making money. They just won't be increasing the amount of money that they are making, so valuation will come down again.<BR/><BR/>So let us imagine now: with Google's valuation at $15bn, are they going to go out and buy the next Facebook for $15bn? No. Are they even going to buy the next YouTube for $1.5bn? Resounding no.<BR/><BR/>And when Google (and Yahoo, etc) is no longer there, to buy all these Web 2.0 companies (YouTube, Flickr, Picasa, Keynote/Google Earth, Blogger, etc.), there goes the exit strategy for the VCs that are now investing in these new startups. No more "flip to the big three" exit strategy means no more VC funding. <I>Especially</I> when the only other business strategy of these Web 2.0 companies was Google advertising.. the stagnation of which is Greg's predicted cause of this whole thing in the first place. <BR/><BR/>Advertising dollars may end up never stagnating. But if they do, Greg's scenario seems completely reasonable. <BR/><BR/>If you have got a reason why Web 2.0 will continue to boom, even if advertising dollars stagnate, I would love to hear it. That's not sarcasm; I'm serious.Anonymousnoreply@blogger.com