Feeds

Failing Web 2.0 stars pray for copyright abolition

Wanted: starving artists to help out web tycoons

High performance access to file storage

Remember the date - the one about an inch above the words you're reading now. 27 May 2008.

Two articles were published today of some note, and if you can put them in context, you can begin see the true, scary picture of internet economics today. The one that's usually too scary for the posh papers or broadcast media to describe.

Exhibit One is a deadpan report in the Financial Times, bylined to Chris Nuttall and Richard Waters. It's titled, "Web 2.0 fails to produce cash ".

This could be the least-surprising headline of this (or any) year. Dog Bites Man rarely makes the news. As we predicted years ago, Web 2.0 was only ever a rhetorical bubble, designed to boost a clutch of no-hope investments into the arms of an acquirer. For a handful of others - mostly pundits - it was a lifeline from a dead-end media job into gurudom. It didn't take a genius to work that out.

(We also despaired that Web 2.0 failed to address any of the significant technical challenges of the day. Which, alas, has proved true - even after VCs have spunked $1.5bn of cash at the Javascript kiddies, we're no nearer to solving these problems. That's because Web 2.0 was "interface" level people trying to solve "infrastructure" level problems - which is a bit like supposing that a talent for painting garden gnomes qualifies you for designing skyscrapers that don't fall over.)

Nuttall and Waters point out that now the VC money is drying up, investors can see that there's precious little to show for Web 2.0 in terms of sustainable businesses.

A good example is YouTube. Acquiring the site cost Google $1.7bn, but even with a "global" audience and Google's best brains now piloting the operation, it only earned $31m last year. Even bullish analysts (Bear Stearns) don't expect this to get beyond $90m this year, and around $165 in 2012. Page rates, which the industry measures in CPMs (cost per thousand), will barely eke above $5. Someway short of hopeful, recent estimates.

So where do Web 2.0 companies go from this vale of tears, this endless sea of red ink, populated by the pastel-coloured rounded rectangles of sinking startups?

Exhibit Two gives us a clue.

We're broke. Can you help us?

It's a post by Gertrude Stein-lookalike Michael Arrington, an investor who hypes companies he invests in. And who recently suckered the Washington Post into reprinting his nepotistic little tip-sheet, Tech Crunch.

"It’s time to rethink copyright laws, and it’s time for copyright holders to rethink their business models," he urges.

High performance access to file storage

More from The Register

next story
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.