Rudelle Blogging

Following the take-over of YouTube by Google last fall, we have seen many comments on the return of the Internet bubble. This 1.6 billion dollar deal for a company with virtually no revenues was illustration that irrational thinking was infecting us again.
Well, 6 months later, it does not look at such a bad deal for Google. On the contrary, the fast growing on-line advertising market shows that it should not be such an issue for Google to monetize this extra inventory.
On-line advertising growth is very much connected to the growth of Internet itself, especially of broadband access. And this broadband access is accelerating in all major countries. As a result, e-commerce is also growing at a nice 30% rate per year with no sign to cool down.
This strong and steady e-commerce growth is financing portals, media and community sites with profitable advertising budgets. This makes the whole picture much healthier than in 1999 & 2000. This is why there is not much to worry about a bubble bust as so far, there is no bubble at all, just plain fast growing market.
Remember all those crazy IPOs in 99. Anything similar today? Not really. Not only companies are getting profitable much quicker, but investors are also much more selective. It looks like for the first time they show some memories of the past to keep the market at a reasonable and healthy level. Not bad at all. ;-)

All along 2006, we have seen Web 2.0 hungry VCs racing to invest in web community startups. They were all trying to replicate YouTube supposed easy cash out. Anything with some Ajax, mashups, open API or User Generated Content would be called Web 2.0 and was supposed to be very hot.
In beginning of 2007, it looks like Web 2.0 is no more a phrase to put forward to attract VCs attention. They have eaten too much of this buzz word and get afraid to get stuck with some lagers who have missed the wave.
However, it’s not because a catchy phrase is no more fashionable that the underlying concepts are dead. Open APIs, mahsups and UGC remain a major key of Internet’s future. Many innovative and powerful business models are still to emerge in this field. Some of them have the potential to overtake the traditional way to do e-commerce and media.
But as for the first Internet bubble, only savvy investors who are smart enough to invest against the crowd will make tremendous leverage in a couple of years on these emerging players.

A couple of months ago, only experts were debating over the web 2.0 phenomena. But recently, we see more and more mainstream national Medias covering Web 2.0.This new buzz gives a fresh smell of bubble.
But what is behind all the excitement?
In fact, what fascines before all the mass media, is clearly not new technologies related to Web 2.0 (Ajax or RSS for instance), nor even the community aspect (which has existed for a long time). What fascines them is two things:
1) the irresistible growth of giant Google which is eating more and more in the mouth of old superstars Yahoo! and MSN
2) the irruption of an unexpected new generation of Net players. Unknown sites like YouTube, Flickr or MySpace made spectacular rises in traffic rankings in matters of months. And even more dary, they have achieved this spectacular rocket growth almost without any dollar spent in advertising!
In 2001, after the burst of the Internet bubble, one believed that the game was over. The survivors seemed to be able to lock the market, in particular large e-commerce sites. A that time, everyone considered for instance eBay untouchable. Moreover, traditional brands finally thought they had their revenge over those arrogant pre bubble start-ups.
Suddenly, this reassuring feeling disappeared. People were surprised to rediscover a basic rule of business: positions are never secured for ever. On the Internet even more than in the old economy, new entrants can always change the rules.
Fast successes tend to fascinate people. One thinks that there must be some hidden dark secret behind such miracles. Well, in some ways, this secret could be called Web 2.0 ;-)