Yesterday, news came out that Dave Sifry, founder and CEO of Technorati has left the company, and eight employees have been laid off.

Soon after Technorati’s WTF was announced and Technorati’s redesign, I noticed a few things happening that raised some flags - in July, executives Adam Hertz (I actually had some interaction with via this blog - he sent me a WTF T-shirt), Tantek Celik, and Liz Dunn left the company.

Then add users feeling frustrated at Technorati’s slacker attitude at keeping up to date with people’s feeds.

Things move so quickly. Only a year ago, when I first started blogging, Technorati was one of the first sites I visited and linked my blog up to, mostly to stay abreast of my single-digit Technorati rank, and seemed to be the place to go to discover new blogs. Today, I find the Technorati Authority Rank becoming increasingly irrelevant, and while I still use Technorati Search occasionally, I find I’m using Google Blog Search more and more. And frankly, more and more of my search result traffic comes from Google, not Technorati - definitely not inspiring me to pay much attention to them.

Total speculation: I believe that ever since the redesign, Technorati has been looking for someone to buy them before the burn rate takes care of their funding. Surely the redesign was an attempt to open up some new revenue opportunites; I wonder how that’s been going.

Sadly, this is how things go in the startup world. Last year’s hotness is this year’s WTF?

Yes, things move so quickly. In the past two weeks, the credit market began drying up and the stock market moved quickly in the other direction. Now, more technology-oriented folks are taking notice and wondering about worst case scenarios for this Web 2.0 boom-bubble-whatever.

• Marc Andreessen notes how an analyst changed a stock recommendation for Countrywide (largest mortgage lender in the country) from buy to sell two days later.
• Jason Calacanis is wondering if this last quarter of 2007 is going to suck fro Web 2.0.
• Here’s some advice from Henry Blodget on how an economic downturn could affect your startup.
• Eric Berlin wonders if Technorati is a canary in the coal mine.

I personally think it’s a bit premature to look at nine people laid off from a startup as some harbringer of doom for Web 2.0. But it’s a strong possibility that a general slowdown of the economy could burst Web 2.0.

I hope I’m wrong, but consider the effect of Countrywide, the largest to bite the big one. And if you want to get really depressed, read this article in New York Magazine, written by Mr. Armageddon, James Cramer:

I fear that the pain and contractions in the housing and credit markets could cause as many as 7 million homeowners who bought houses in the past few years to flee or be tossed from their dwellings, even if the rest of the stock market thrives. It’s why I went off the reservation and screamed about this problem on television the other day (my latest unhinged rant).

But just today, Cramer, who was crying and pleading about armageddon only a few weeks ago, believes today’s Fed action of lowering the discount window interest rate averted a 1,000 point drop (crash) either today or Monday. He thinks we’re now headed for 14,500 by year’s end. Go figure.

Things move so quickly. We may be out of the woods most people didn’t even acknowledge we were in. I guess it’s good idea to just try and be prepared for anything.

Categories: General, Technology :: Tags: Economy, Engtech, Technorati :: Trackback URL
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