Intense Web Media

Much has been made about “Web 2.0″ and the business models that have spun from it. Most “Web 2.0″ sites rely on advertising or they are “Built To Be Acquired” as I like to say. Many of these companies have been funded with millions of VC dollars (Mike Arrington counts $600 million in 2006). Something is about to change.

Reality will soon set in as the new year seems to have changed the thinking of some and brought their spaceship back to earth. The case for this argument is evidenced by the entry of Browster, FilmLoop, and Raw Sugar into the dead pool in the last couple of weeks.

I am calling 2007 the year of “The Great Purge.” Web 2.0 companies that are copycats, duplicative, and non-innovators will die.

Competition is a great thing as it breeds innovation and the users are the benefactors. The people behind the dying startups will move onto bigger and better things after learning slight deviation from the offering of another company is not enough. They will learn differentiation is the key as its the fundamental substance of marketing material. Differentiation is also what the user feels when visiting a new site. The entrepreneur also must learn that their service must be so valuable, the user should want to pay for it either through clicking ads or subscription. Making something that someone can live without is not what they should aspire to.
The VC’s who shut off the faucet will also become better at their trade learning that companies should be more innovative and expecting a company to be acquired is fool’s gold. Their investors will demand this.
The result of this paradigm shift will be a more succinct web. Given that sites will have to be more innovative, the users will benefit from more services and new media. We will see more disruptive startups that create their own form of media. These startups will be smaller, lighter, develop their product outside of an office and many times on different continents. These startups will also take less money from VC’s as the cost of development has lowered immensely.
This is all a prediction and it may happen more slowly than a few weeks, but one can’t deny the early progression in this direction.

Note: I want credit as being to first to call this new age “The Great Purge” (I am particularly proud of it).