a new bubble?

I was working at E*TRADE when technology and Internet stocks were hitting new highs every day and investors eagerly bid up the prices of new companies coming to market that had no reasonable plan to make profits. The companies and supply-side analysts would use metrics such as page views and click throughs and eyeballs and "mind share" to justify valuations that were insane.

Nowadays, the concept of Web 2.0 has created the idea among some that the websites discussed in the UnME Jeans case are overhyped. The websites discussed are facebook, YouTube and Zwinktopia. Some argue that these social networking sites are a fad. The effect of advertising on these sites is hard to measure. And, the Internet is always changing and there will undoubtedly be new sites that capture people's interests, but I think that social networking websites are here to stay. I have a facebook page, and while I have never posted a video to YouTube, I have wasted at least a few hours here or there looking at different videos. I know a lot more about a number of my facebook "friends" than I did before, even when I saw them on a semi-regular basis. Sites like youtube that are user-driven and sites like facebook that promote social affiliation are here to stay and will become more popular in coming years.

Companies should spend money to advertise on these sites and not lose market share to companies that are willing to experiment with these new mediums. The price of these new sites is right (free) and the democratic aspects of the sites have lasting appeal. The term "web 2.0" will go out of style (if it hasn't already), but the concepts of web 2.0 will be used by successful websites in the future.