Interesting piece on The NY Times‘ tech blogs today, Web 2.0 meets Darwin, pointing out, unfortunately, that what goes up (some Web 2.0 ventures) can also go down.
Watching the stock market this morning has been like attending a bungee jumpers convention. (“Does his cord look like it’s a little frayed?”) Meanwhile, it doesn’t matter whether the Dow is 9000, 8000 or 7000 for tech companies to realize they need to pull away from the cliff as fast as they can. Signs of turmoil abound.
Author Saul Hansell cites several fire sales and failures, and adds:
The stream of negative news is just starting. Radical cutbacks. Fraud discovered. For every company we hear about now, there are many more that realize they are on very thin ice and are trying to figure out if they can avoid a very cold bath.
Further on he cites Rafe Needleman’s list of 11 companies in trouble . . .
Rafe Needleman takes his shot at picking this generation’s biggest losers. It is a gallery of those nifty little Web 2.0 companies that figured they would get big fast and worry about revenue later: Twitter, Meebo, Zillow and so on. He also wonders about some first-generation survivors that may not be able to make it through a second ice age, like Skype and Ask.com. I don’t agree with his analysis. MySpace may no longer be hot with a bullet, but it has revenue of $800 million a year and tens of millions of users. We should all have that kind of trouble. In any case, the dead pool is a game to play in between watching the Dow gyrate and the presidential candidates hurl mud.
Lots of bad news here, but Hansell has a point: Revenue of $800 million and tens of millions of users aren’t really that bad. “We should all have that kind of trouble.”