Web 2.0 - another dot com boom? | The Thinking Blog ~ Knowledge Grows When Shared
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09 December 2006

Web 2.0 - another dot com boom?

Is it just people getting creative all of a sudden or is there an Ajax-based personalized homepage start up spree? After doing considerable research, I could find 20 (!) websites, including the old players of the game such as Google, Yahoo, and MSN. Amazingly as it sounds, this reminds me of the Internet-based companies with uber-valued revenues and the soaring stock market prices before its bubble was burst back in 2001.

Historically, the dot-com boom can be seen as similar to a number of other technology-inspired booms of the past including railroads in the 1840s, automobiles and radio in the 1920s, transistor electronics in the 1950s, computer time-sharing in the 1960s, and home computers and biotechnology in the early 1980s. A combination of rapidly increasing stock prices, individual speculation in stocks, and widely available venture capital created an exuberant environment in which many of these businesses dismissed standard business models, focusing on increasing market share at the expense of the bottom line.

Moreover, the dot-com model was inherently flawed: a vast number of companies all had the same business plan of monopolizing their respective sectors through network effects, and it was clear that even if the plan was sound, there could only be at most one network-effects winner in each sector, and therefore that most companies with this business plan would fail. In fact, many sectors could not support even one company powered entirely by network effects. To remind you, take another look at the Top 10 dot-com flops. This time however, things are a bit different than just a simple technology hype.

After the bubble burst, valuing the survivors did become more sensible, and some are assessed fairly easily with standard approaches. A site will be more valuable if it uses a proprietary technology than if it simply offers services competitors can easily duplicate. That's especially true of search engines, where you can really compare them on objective criteria. Google is without question the premier Internet search service and has a proven track record of profitability.

Now take a look at personalized homepages. They give you the ability to create quick snapshots of information that you may visit on a frequent basis. Making a personalized homepage your start page for your Web browser ensures that you can access that information quickly at any time. Adding new content to a personalized page is easy, and you can even drag and drop them to any column you want with the click of a mouse.

What each site is offering may seem similar in how they work but the user interfaces actually function differently. I have excluded Google, Yahoo, and MSN from the list below as they are nothing new. It is well worth experimenting with each service and let me know how you think they will generate profits in the future.. or will it be another case of history repeating itself?

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