VentureOne recently released today an amazing stat: more than a quarter of a billion dollars (US$262MM) has been invested in “Web 2.0″ start-ups in the first half of 2006! I don’t know about you but that smells a lot like over funding to me..which means a correction will come eventually.
For those of you who have been living on Mars, the term Web 2.0 was coined in 2003 and refers to the latest generation of Internet-based services companies. VentureOne narrowed its definition to companies with business models organized around a combination of User Generated Content (UGC), networking and collaboration. Web 2.0 start-ups also include technologies like AJAX and real simple syndication (RSS) as well as applications like wikis, podcasts, tagging, blogs and social networks. Note that despite all the hype, Web 2.0 deals represent only a sliver of the $13 billion invested in U.S. start-ups this year. The median deal size for Web 2.0 companies during the first half of the year is $4.4 million, 41% lower than the $7.5 median for venture financings as a whole.
My parting word is that I vote we rejigger the numbering such that we’re now in “Web 3.0″. “Web 1.0″ was the birth of the Internet, “Web 2.0″ was the Dotcom Crash and “Web 3.0″ is the rebirth. That way, we’ll never forget that every industry (Internet included) has a cycle of boom and bust…
