Follow us:

Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

December 27, 2006 at 11:31 AM

WSJ hosts Web 2.0 bubble debate

Is it a another bubble? The debate rages on over whether the surge of Internet startup companies and the venture capital funding them — the Web 2.0 phenom — constitutes a bubble like the one in the late 1990s.

The Wall Street Journal today published a dialogue between two venture capitalists who made bets during the last go-round and are investing again today.

Todd Dagres of Spark Capital says there is a Web 2.0 bubble. One reason, he notes, is that many startup companies are copying existing business models and there’s a low barrier to entry. “R&D in a Web 2.0 company = rummage & duplicate,” he says. Ouch.

In the opposite corner is David Hornik of August Capital and author of VentureBlog. He notes that much less capital is flowing into Web 2.0 companies than the Internet startups of the late 1990s received. And venture capitalists get quick feedback on the success or failure of these upstarts. “VCs may lose their capital invested early in Web startups, but the amount of capital sunk into failed businesses will never snowball the way it did in the late 90s,” he says.

Here’s a link to the whole back-and-forth.

Comments | More in Entrepreneurs & VCs, Web 2.0

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►