Wednesday, August 23, 2006

Zach at ClickZ on the Bubble-Issue


Zach Rodgers, father of twins and ClickZ editors writes in the blog today on the question of whether or not we're in a bubble:

I'd argue that to some extent it's also an end-user and advertiser problem, as people become reliant over time on services that are actually not viable businesses, and as marketers struggle to understand and develop relationships with myriad new sites, applications and online services that become more myriad by the day. It's a problem of wasted time and research for harried media buyers.
Yes! I totally agree with ZR. In fact, I was trying to capture this idea yesterday, but Zach has really nailed it. If we look at these Web 2.0 companies, we see a huge, attentive audience. Naturally advertisers crave this, and it should be a seller's market for the publishers.

But, if these companies are built without a business model, as Zach puts forward, is this a market built on a shaky foundation? Meaning that, once the sites start to sell ads, will they loose their audience asset? It's like having a pair of shoes that are absolutely perfect and beautiful, but are too delicate to actually be worn outside. (yes...a male human just made a shoe analogy).

We'll see. We're hitting an interesting inflection point where the VCs are going to start looking for the revenue stream. If opening up that stream of cash also opens up an audience leak, we're in for some trouble.
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2 Comments:

Blogger Zachary said...

hey man, you made my day with this one. pamela parker pointed out it's also a problem for publishers who might add these sites to their contextual networks b/c those tend to be longer-range deals with big dollars promised upfront (e.g. google/myspace: $900 mm)

9:54 AM  
Blogger Gary Stein said...

excellent. This is fodder for my CZ column next week as well.

Now: how 'bout some baby pics?

11:08 AM  

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