Point Counterpoint

I suppose many of you have seen the great email debate in the Wall Street Journal between Todd Dagres of Spark Capital and David Hornik of August Capital on the topic of Whether Web 2.0 is a Bubble.

I know Todd and David pretty well and the email debate captures both of their personalities perfectly. Todd is impassioned, prone to making bold statements, and represents the more cautious east coast investor mindset. David is the classic lawyer rebutting Todd with reasoned informed logic.

The funny thing is I agree with both of them. There is a bubble in new company formation in the web 2.0 space for sure. But it has not really spilled out beyond the startup world and the VCs who are funding in this sector. A big question for 2007 is whether it will spill out. I sure hope not.

Comments

[Stephen L. McKay]

Fred,

Very interesting scenario unfolding. As I see it, you have a lot of “niche” web 2.0’s emerging, and the smart VC will look to acquisition as the exit strategy of choice for these businesses. However, you also have true disruptive stuff like Venice, and Wikiasari (if I’m even spelling it right). Mark Cuban has a good post relative to this, and his commenter’s point out some pertinent facts regarding Google’s acquisition of YouTube.