There is a couple of great articles around the web right now about the 2.0 bubble, most by VC bloggers themselves, this is a nice article from Atlantic monthly online.
My own opinion of social networking sites is a bit more complex. I think the idea is inherently flawed because it seeks to wall off a section of the internet and then monetize the contributors. AOL started this trend, but they just charged you a monthly fee. How did that work for them? Who do you know that is still using them?
These new sites will simple become the “Geocities.com” or “Broadcast.com” of the new bubble. Yahoo! paid $5.7 billion for Broadcast.com in 1999 how much do you think Yahoo! is using that technology these days? Friendster.com was the biggest thing ever a few years ago. They even spurned Google as a suitor. They are probable kicking themselves for that one now.
These sites that rely on ads and traffic will simply shrivel up and go away. There will always be some new site that is hotter and more “with it”. People will flock to the new sites with veracious speed and you will hear a huge sucking sound as the AD revenue for the previous site will dry up.
Besides this bad revenue model, which in the long run is erratic and unsustainable, I think it encourages peoples idea that they know about the internet when in affect they know very little about how the web works. It wasn’t long ago that every tard with a Geocities.com webpage thought he was a web designer. Are we poised to send a whole group of people out into the workforce with this as their knowledge base?
Granpa Simpson: “I’m afraid of the future.”