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Web 2.0 Venture Capitalism

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del.icio.us seems to be down again. Visiting del.icio.us now (10:10 PM EST,Dec 27,2005) throws the following error:

System error
error: could not get config: err= eval= at /www/del.icio.us/site/autohandler line 9.
5: $setbundleview => ''
6: $noui => 'no'
8: <%init>
10: do "/etc/delicious/config.pl" or die "could not get config: err=$! eval=$@";
12: $dbh = $db->{master};
code stack: /www/del.icio.us/site/autohandler:9

raw error

del.icio.us has faced downtime and outages at least twice recently, both explainable by tech mavens, and perhaps related to the need for Six Sigma+ availability, but interestingly, and purely coincidentally, all downtimes have occurred post the Yahoo! acquisition.

One is somewhat addicted to the convenience of del.icio.us as a device-independent storage of bookmarks, and the serendipity of finding links via del.icio.us/recent or /popular – almost a measure of zeitgeist, albeit among a small uber-techno-chic subset of the human race, it is a valuable resource. Various clones do exist, but why bother?

Yahoo!’s acquisition raises no concerns, at least for me – flickr goes well, and they have ably emerged a leading player in the Web 2.0 discussion by answering the technological question of ‘buy vs. build’ one way, unlike Microsoft or Google. There seems to be as little method to their acquisitiveness as there is to Google’s or Microsoft’s, but when cash is cheap, and startups plentiful, a shot in the dark is all you need to make it in Web 2.0 and beyond.

eBay snapped up Skype, Oracle bought 13 companies, in some of the best tech moments of 2005. In an analysis of Google’s acquisitions, Adam Rifkin noted,

— the assets of Deja and Outride, plus Pyra, Applied Semantics, Kaltix, Sprinks, Ignite Logic, Neotonic, Picasa, and Keyhole — reveals a common theme: these are all small, creative, engineering-driven teams with no-bullshit cultures and interesting products and/or innovative technologies. A key challenge going forward is… can Google absorb bigger companies that contribute revenues

Wired, BusinessWeek and other commenters have noted the emergence of a new variety of venture capitalism, one driven by companies like Google, Yahoo! and Microsoft, to the consternation of traditional VCs.

The Google effect is already changing the delicate balance in Silicon Valley between venture capitalists and startup companies. Instead of nurturing the most promising startups with an eye toward taking the fledgling businesses public, a growing number of VCs now scour the landscape for anyone with a technology or service that might fill a gap in Google’s portfolio. Google itself and not the larger market has become the exit strategy as VCs plan for the day they can take their money out of their startups

Analysts caution that the market cap driven heft of these companies is ephemeral, and to not use it could mean a withering away of the Google Effect. Startups, though, will continue to hope and dream of the proverbial knock on their door, by Mr Moneybags.

Who’s next in the shopping cart? digg.com, Slashdot, Netflix, Technorati or boingboing?

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  • http://www.theamericanmind.com Sean Hackbarth

    How about someone buying both boing boing and digg.com and trying to earn instant tech cred?

  • http://selfaudit.blogspot.com Aaman

    It could happen – both cannot be valued as highly as say, Flickr, or del.icio.us. Whether this would give them tech cred, or even tech street cred is another question. Yahoo and Google already had tech mojo before their acquisitions.

    On the other hand, companies that exist solely to acquire other companies (hint: S-C_O) seem to lack tech or street cred

  • http://selfaudit.blogspot.com Aaman

    Incidentally, del.icio.us is back up now

  • http://selfaudit.blogspot.com Aaman

    From the del.icio.us blog,

    Our colocation facility bounced the power again (apparently in order to deal with the failed UPS that caused our previous incident.) We are on route to the facility to bring servers back online now and that should be done shortly. We have been and will continue to work with Yahoo! to migrate to better facilities as fast as humanly possible

    Web 2.0 to the rescue!