Dot Com Crash 2.0

The past few weeks I’ve felt like I’ve been bundled into a Delorean and traveled back to the nineties – a Conservative government making a hash of things, Irish bomb warnings in London, and dot com companies listed with eye watering valuations. Linked In reached around $45 a share last week on its first day and when you look at Facebook (valued at $55 billion) and Twitter (valued at about $6 billion) you’d think that we were in another Dot Com boom. But we all know how the last dot com bubble burst. So are we heading for a dot com 2.0 crash? Very possibly.

The last Dot Com saw internet companies fold very quickly and even those that survived are now being sold at values far less than they were purchased for during the boom (Friends Reunited and MySpace anyone?!). But it’s not necessarily a bad thing. Businesses, digital included, need to evolve and offer features that users ‘need’. Looking at current platforms there is no doubt that Facebook will survive, possibly at a lower value. It’s become so ingrained into our social conscious that it’s part of everyday life. Where MySpace failed, Facebook reigned as it got the model right.

However I can’t see how platforms like Foursquare or Gowalla will go on to survive on their own. The only way they could survive is to be bought by someone like Facebook and embedded into their platform. The same could be said about ‘newbie’ Groupon which is already being imitated across the web.

It is an inevitable part of evolution that some will fall along the wayside. So I wait to see the winners and losers of the Dot Com Crash 2.0.

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