The dawn of the twenty-first century saw a lot of Internet companies crash and burn in the first DotBomb era. With the recent economic problems, Rafe Needleman from Webware talks to CNETTV about the possibility of Web 2.0 companies following them into oblivion.


Last week, I asked the question about whether the recent economic meltdown had started to affect your IT budgets. So far only 40% of TR members who responded said that they’re unaffected by what’s happening.

Beyond what’s happening on a personal level, businesses in general are facing dire times. The likes of GM, GE, and others that were teetering on the brink may be pushed over the edge. Internet companies are far from immune as well.

Having recently recovered from the DotBomb era at the turn of the twenty-first century, Web 2.0 technologies and new Web sites had caused a bit of a resurgence in the Internet economy. However, now as rough times have occurred in the general economy, so too has the Internet faced the possibility of a DotBomb 2.0 from the Web 2.0 start-ups.

The featured video here comes from TechRepublic sister site CNET TV as part of their Daily Debrief series.  In it, CNET Webware editor Rafe Needleman discusses five Web 2.0 companies that he thinks might be in trouble.

The DotCom 2.0 Dead Pool

In the video, Rafe lists the following companies that might be joining their New Economy predecessors:

  • Twitter
  • Pandora
  • Skype
  • Zillow
  • TripIt

Beyond these five, Rafe lists another six in his WebWare blog on CNET that he believes also face an uncertain future. Additional candidates include

  • Meebo
  • Ask
  • Second Life
  • NetVibes
  • Myspace
  • Daily Motion

There are different reasons for each, but most of the problem centers around the issue of monetization — trying to figure out how to take a really cool service on the Web and turn it into a revenue stream other than relying on ads.

The bottom line for IT leaders

Now if you’re wondering how all of this is applicable to IT leaders in companies other than those listed, this is a case of using your influence to make sure that others in the organization don’t repeat the failings of the Web 1.0 era. Each one of these companies have a lot in common. They are based around great ideas and have great technology behind them. However, each of them suffers from similar problems to the Web 1.0 companies — there’s no clear and consistent revenue stream. Relying soley on advertising isn’t always a winning bet.

As an IT leader, you may not be in a position of influence enough to direct the way a company markets itself or derives income. At the same time, however, you may be in a position to remind other decision makers about not getting too dazzled by technology in pursuit of a business plan.