A Growing Chorus of Reason

Amid the wild cheering and vast overvaluation that continue to inflate the Web 2.0 circus tent is a growing chorus of reason, trying valiantly to insert some logic and business sense into the conversations.

Dick Parsons, CEO of Time Warner, says what every other right-thinking CEO in America must think- that YouTube and Facebook are being overvalued.

Fortune Magazine has a story about Google’s chaotic search for it next big hit, which would be its second:

[I]t’s clear from Google’s tentative lurches into new forms of advertising and its spaghetti method of product development (toss against wall, see if sticks) that the company is searching for ways to grow beyond that well-run core.

Business Week has a cover story on click-fraud, the dark side of online advertising which has resulted in a growing distrust of the online advertising model:

In June, researcher Outsell Inc. released a blind survey of 407 advertisers, 37% of which said they had reduced or were planning to reduce their pay-per-click budgets because of fraud concerns. “The click fraud and bad sites are driving people away,” says Fleischmann. He’s trimming his online ad budget by 15% this year.

Meanwhile, a few bloggers continue to ask the questions a lot of the Web 2.0 cheerleaders don’t like to hear.

Nick Carr talks about lowered estimates for online ad spending.

Warner Crocker, who in a later post says I am a navel-gazer, asks the great question that my belly button lint has spelled out so many times before:

I’m still puzzled by the hustle to move everything to a web-service with money based on advertising (I know not every web service goes this way, but most have at least an eye on that model) when we have a culture that, in general despises advertising of any stripe. But yet, onward we go as we stick ads on this service and that.

The out of whack scale of much of Web 2.0 is the culprit for both the bubble blowing insanity and the cautionary chorus.

Until enough people demand that reason, good business sense, a sustainable revenue model, and some semblance of scale be introduced into the equation, we will always have the barkers hollering cash at the door to the tent and a crowd of people clutching their wallets and wondering whether they should step inside the tent or join the chorus.

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