How YouTube Is Already Inflating Web 2.0
So there are some rumors out that Metacafe, another Web 2.0 video site may be acquired for around $200 million.
It seems the price is inferred based on the $1.6 billion that was spent by Google to acquire YouTube. There isn’t even any question anymore whether that amount was too much. It just “is.” And some say $200 million for MetaCafe is a “steal”. So as I predicted earlier, the YouTube sale is already being used as a benchmark vindicating the valuations of many current Web 2.0 start ups.
Next, there’s the inspiration that YouTube provides. I read an interesting (to me, anyway) Web 2.0 article today (being an AP story, it’s also in BusinessWeek and the New York Times… talk about great press) about Buxfer, a Web 2.0 roommate-expense tracking website. Meaning, if you pay the electric bill one month but your roommate buys your share of groceries, you can give them credit, so nobody feels like they got the shaft at the end of the month.
Note: I don’t know about you, but that sounds like a kind of curious business model to me. But there are already competitors, dug up after a few minutes of Google searching: Billhighway, Bill Monk, Roomind.us… I mean, it’s past the point where if you come up with a halfway decent idea, someone else is already doing it.
So Buxfer is also latching onto the next Web 2.0 phenomenon: social lending. Maybe we’ll get user ratings to determine a person’s credit rating.
Anyhow, continuing through the article, the three students that created the site are already looking forward to the next step. But one of the teachers how this can happen doesn’t seem worried that the site isn’t profitable: To that, a founder quips:
“Of course these days you don’t have to make money. There’s YouTube after all,” he said.
“I think the plan for Buxfer probably is to build it up for nine months, get acquired for tens of millions of dollars and then move on to the next thing.”
I don’t know about you, but I kind of grimace at that sort of talk since it reminds me ever-so-slightly of Web 1.0 hubris. But it’s a perfect example of how the YouTube sale has also become the magic gold ring floating in the air - that people are grasping for - for better or worse. If those two could do it, anybody can.
But there’s one patient hint that Buxfer might have a shot at it: Their current costs are only $90 a month for hosting. Being a college student definitely has its advantages.
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