Dave Winer’s getting tons of attention for a mini-essay suggesting that Google’s stock will signal the fate of the current Web 2.0 bubble — when the stock crashes, the bubble will deflate.
His comments were spurred by Google’s decline yesterday, which in turn came after a Barron’s story that said the stock was overvalued.
Winer said Web 2.0 “is nothing more than an aftermarket for Google. Startups slicing little bits of Google’s P/E ratio, acting as sales reps for Google ads, and getting great multiples for the revenue they generate by fostering the creation of new UGC [user-generated content] to place ads on. When Google crashes, that’s the end of that, no more wave to ride, no more aftermarket, Bubble Burst 2.0. And the flip of this is also true — as long as Google’s stock stays up, no bubble burst.”
Web 2.0 companies may very well be riding Google’s bumper.
Winer hit on a really interesting relationship, but I wonder if it’s more simple. Does Google’s stock reflect investors’ streak of enthusiasm for online advertising and Internet stocks in general? If that streak ends and the stock falls, any company in the Web 2.0 category will suffer regardless of its relationship to Google.
In the meantime, Google’s investors are still beaming.