November 01, 2006

Bubble 2.0 Status, Search Startups, Lottery Structure

First, a recitation of my bubble-prayer:

There's an old oil-business prayer, from years ago:

"O Lord, just give me one more oil boom - I promise not to piss it all away this time."

O Lord, just give me one more tech bubble, one more collective financial insanity where I might be able to get founder's stock and be bought-out for absurd amounts of money in a ridiculously short time. I promise not to waste it all away this time doing censorware decryption and fighting for net-freedom.

So, with the buyout of Reddit (a news popularity-mining/chat site), keeping in mind Google buying YouTube, are we there yet?

Objectively, I don't think the money is falling from the skies yet (and may never get to that point).

There was a recent interesting article examining: "Search Applications : Search Startups Are Dead, Long Live Search Startups"

While there will undoubtedly be opportunities for start-ups to extend and improve core search (which is where the vast majority of effort has been extended to date), some of the most interesting opportunities will come not from trying to improve the accuracy and context of a single query, but from looking at aggregate information about search indexes, results, and queries across time. In other words, the marriage of this search infrastructure, with persistent queries and advanced analytics will likely create an entirely new class of applications that generate insights and create value not by finding the specific piece of information someone is looking for, but by analyzing the ebb and flow of information across the web. It is here, in this new world of search applications that more than a few start-ups are likely to find a happy home.

However, there's a problem with focusing only on the lottery-winners, and it's neglecting to note how many tickets don't win. What's problematic about Bubble 2.0 is how the ratio seems to be even more lopsided. Of course, by definition, most start-ups fail, that's nothing new. But I draw a different conclusion from all the articles that seem to breathlessly proclaim how that ratio is now becoming even more extreme, and lottery tickets are cheaper than ever. They usually frame this in a positive manner, praising niches and "User-generated content" for which I'll quote a sardonic definition:

Stands for "user-generated content," a new form of online scam in which you make all the content, and we keep all the money.

Somewhere, I think there's a moral indictment to be had of the academic fashion for cheerleading this stuff as the greatest expression of "democracy". It's obvious why they do it, and far worse has been done, but it's still an abdication of the standards of critical thought.

Anyway, the sucker/winner ratio still looks outrageously high in my corner of the tech world, some big payoffs notwithstanding (remember, always, someone wins the lottery, "it could be you" - but it probably won't be).

By Seth Finkelstein | posted in cyberblather | on November 01, 2006 11:59 PM (Infothought permalink)
Seth Finkelstein's Infothought blog (Wikipedia, Google, censorware, and an inside view of net-politics) - Syndicate site (subscribe, RSS)

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