We all remember the late 1990’s when the Internet was exploding and people were running around with one page business plans that described things vaguely and no concept of how they would make money. Well, we all know that enough bad investments were made that the overall market collapsed, and we officially had a “bubble burst”.
Now there were a few technical problems that help lead to the burst with the companies that were relying on the Internet for business.
- In the late 1990’s, the majority of consumer Internet access was at 56Kbps.
- The average user was not comfortable using their credit cards for purchases over the Internet.
- There were significant concerns over security on the Internet.
These had as much to do with the burst as seriously flawed business plans.
Well, there is a new generation of the web now referred to as “Web 2.0” and there are a lot of investors thinking of jumping on the bandwagon and getting some investments in the new companies being created using Web 2.0 tools. Some will overlook the flaws in the business plans for fear of missing the boat on some serious market gains especially when we hear about extraordinary prices for YouTube and Myspace.
I do believe that a number of failures will ocurr in 2007 but think that many of the more saavy investors learned their lesson and we won’t have a catastrophe like we experienced with Bubble Burst 1.0.