Is User-Generated Content Overrated?
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Remember the dotcom bubble? "It's a whole new world," we were told. Profits weren't important. Revenues were irrelevant. The only thing that mattered was how many users you had, how fast you were growing and how wide your Powerpoint presentation could open a venture capitalist's wallet.
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Of course, that turned out to be a load of hot air.
The people who were putting money in did in fact want their money to come back -- and to bring friends. When that didn't happen, reality set in, stock prices fell and options agreements gave way to P45s. It wasn't fun.
Now when we look back at that time, we wonder how we could have been so naive.
Web 2.0 or Bubble 2.0?
And yet the hype surrounding social media and user-generated content has been no less frothy. Facebook was the darling of the news after Microsoft gave it $240 million -- at the kind of valuation that would have impressed even dotcommers of the nineties. Other Web 2.0 sites have been associated with numbers almost as high. MySpace was sold for $580 million, Google coughed up $1.65 billion in shares for YouTube, and it's anyone's guess how much Twitter might be worth.
Of course, all of that might turn out to be fantastically prescient. If any of those sites turns their new owners or investors into even bigger billionaires than they are already, the expense will have been worthwhile and the site will be enormously successful. So far, of course, it hasn't happened.
At the moment, none of these sites is profitable and Microsoft's investment in Facebook may have more to do with a desire to keep Google out of a big advertising market than a reflection of the real value of the site.
That doesn't mean they'll never be profitable, of course. But for those of us who went through the first dotcom bubble and heard the same optimism about Time Warner and AOL, there is a strong feeling of deja vu and a sense that maybe when it comes to the financial value of social sites we should stand back and wait for the crash.
Is Television As Sick As It Looks?
The hype regarding sites that depend on user-generated content isn't restricted to financial value though. There's also been much said about the cultural value of Web 2.0. Television might not be dead we're told, b |
