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Sunday, October 12, 2008

Social Web to Flame Out?

Daniel Lyons in Newsweek:

Silicon Valley has suddenly realized that the collapsing economy means trouble for tech companies, too. Especially at risk are the new startups created in the wake of the last dotcom crash in 2001. The signal traits of these Web 2.0 companies are cutesy logos, odd-sounding names—Twitter, Zooomr, Digg, Ning, Loopt—and flimsy business plans based on a vague notion of luring millions of people to free Web sites and someday selling advertisements. Most lose money. Some have raised enough venture-capital funding to survive for a year or more. Some may be able to raise more from venture backers, albeit at onerous terms. But many are going to flame out.