Web 2.0 on the Ropes. . . Kleiner Perkins Halts Investments

That's very interesting.

It'd be nice to qualify when they stopped investing in web 2.0. In fact, it's possible they never invested in web 2.0 itself. As any VC will say, they're investing in the business and the people, not a meme. So, is it possible they would claim never to have invested in web 2.0 companies?

Can you ask them to qualify the statement?

Either KP is getting sucked in by the hype end of Web 2.0, and failing to understand what it's really about, or else, more likely, they are using another term for the same thing.

At the end of the day, there is a deep, long term trend towards the network as platform, and to applications that leverage the true strength of that platform. That's what *I* call Web 2.0, and I know that KP is still investing in that trend.

(They are, however, also taken with many other important areas, such as energy and the environment, that are increasingly distant from the web.)

But I think the real way to interpret this comment is to say that if a company needs to identify itself as a "Web 2.0" company rather than describing the problem they are solving, or the opportunity they are creating, then they are just playing the buzzword game, and aren't worth investing in, regardless of the buzzword!

Richard, exactly. Web 2.0 could be easily discarded and other definitions found.

I will find out when the investment stopped...

Web 2.0 is a very loosely used term. The new patterns on the web (AJAX, social, openness, etc) have all been put together to describe it somehow. As a result, pretty much all web companies these days have some element of 'Web 2.0' in them, whether they want it or not ! Facebook could be described as a 'Web 2.0' fluff company - they use AJAX, are all about 'social', have an API, and their business model is based on advertising. But wait...they went from $0 to $15 billion valuation in 3 yrs :)

To say that they won't invest in Web 2.0 means that they won't invest in web startups, which I doubt is their intention. Abstract terms like Web 2.0 are best left avoided :)

The simple issue with Web 2.0 is that it tends to have little or no Porter "Sustainable Competitive Advantage" or even accounting-based "Profit Margin". The business models aren't conducive to creating real value. It's not that one can't create such a model for low/zero margin products like open source or web - you definitely can. But these aren't it.

The basic laws of economics and of the sustainable start-up still have not changed. The dot-com period claimed they did and Web 2.0 startups seems to be repeating the claim. Without the above factors you aren't growing the economic pie, only slicing the existing pieces thinner. What part of this do VCs not get? Have they been sucked into the garbage that's been driving the Wall Street goons?

Manufacturing matters. Innovation can not be done at a distance. Physical products have competitive advantage over ephemeral products.

Lastly. Bootstrapping works! Even for a hardware company.

Does KP matter these days?

Name one successful investment Randy Komisar has made.

For the past few weeks it seems everyone in the blogosphere has hopped on the anti-web 2.0 bandwagon, and for no apparent reason.

People are comparing web2.0 to historical bubbles but without any real current evidence to suggest that web 2.0 resembles any of these bubbles in the least.

I don't think any of these people are thinking for themselves, rather, it would seem they're simply regurgitating what a few morons pass for real insight regarding their opinions about what constitutes a bubble without even really doing their homework on what a bubble is, and it would appear this disdain for anything web 2.0 arises from the fact that ignorant people are fighting for the helm in terms of where exactly this web 2.0 phenomenon will go.


The only people who are 'skunk drunk' on their kool-aid are the bloggers who try to pass regurgitated word vomit regarding concepts they haven't even carefully analyzed for something of merit and value...

I apologize about the rant, it's just that this (web 2.0 back-and-forth) is starting to get REALLY ridiculous. :-)

Seems like Tom Perkins is making Web 2.0 investments on his own :-) ...

http://www.newsgroper.com/tom-perkins/2007/11/05/tom-perkins-10mm-xprize/

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Maybe Randy got burned on his investment of Platial.

If they entertained investments in Web 2.0 companies, they might not even have time for intermittent biobreaks.

I view Web 3.0 as something about new forms of communications (maybe something like a ubiq/pervasive form of Cisco’s TelePresence product), not the Semantic Web. This being said, I could see KPCB investing in “new forms of communications” (Interactions 3.0) or in a Semantic Web-based venture like Twine.

I view Twine as perhaps a first take on Web 3.0 firms, moving beyond the ad nauseum of the Web 2.0 world.

We are witnessing an emerging Internet better described as an "Internet 2.0" world, where technologies such as RSS have nothing to do with the "Web" yet are unique to this phase of the Internet. It clearly looks to me that we are building an Internet 2.0 world and anything "Web 2.0" would be a subset.

This paragraph belies a deep and fundamental misunderstanding in exactly what the Internet is and exactly what the Web is.

In very brief terms: The web is anything related to HTTP traffic (and usually web browsers, though not always, see CURL and other HTTP based clients). The Web is simply one of several applications that run on the Internet. The Internet relates to TCP/IP and other lower level protocols.

Stating that RSS has nothing to do with the "Web" is a huge mistake. RSS is served over HTTP, over the Web. It is part of the Web. Period.

RSS and other higher level protocols do somewhat abuse the Web by using HTTP as basically a kind of bloated line protocol, but they are still part of the web because they use it and those documents are still accessible through vanilla web browsers.

This entire paragraph should be struck from the article: it simply makes no sense.

There is a true Internet2 but it is an academic project at this time (and, honestly, probably always will be, the current form of the Internet is far too entrenched to be replaced) and has absolutely nothing to do with "Web 2.0".

Tom certainly has stirred up a tempest in this tea pot, but that is good for the blogging business isn't it. As much as the controversy is interesting, it must have been difficult to hear me clearly across the table. Tim's comments are more to the point. What is the definition of Web 2.0? Nobody would know better than Tim, but for me the moniker is getting threadbare and seems to focus backwards, not forward. I am looking for the next set of innovations - and I will let Tim name them since he seems to have a knack for it. I am afraid that the noisy room may have garbled Tom's hearing. KPCB certainly has invested in some of the greatest "Web 2.0" companies like Amazon and Google. And we have selectively continued to fund terrific consumer internet entrepreneurs, like Paul Martino of Aggregate Knowledge who was the host of our dinner that evening. I am sure there will be plenty more, whatever you ultimately choose to call them :)

Web 2.0 is a hyped up bubble. Many people tuned out of it early 2007.

With the term being trade marked, it has become useless to use. It is just surprising that a term like that was even allowed to be trademarked. How about trademarking Web 1.5? Web 2.1? Web 2.004? Looks like Tim (with all due respect) has a tough time trying to redefine it everytime people question it. What Tim thought is no longer relevant, if the common meaning has changed over time. The relevance of the trademark is gone.

With Social Web being opened all over (flattening the industry), and with the elusive Semantic web (flirting with old AI concepts mixed with hope) -the folks who live and push bubbles and hype around need to reassess business models, opportunities and true innovation.

KP has taken the correct step in not falling for the hype anymore.

Web 2.0 might not be so bad if the companies ever got past the "beta" stage. (Because, according to every logo, they are still in beta.)

Tom,

Web 2.0 is and has been a buzzword since the very first day without a clear definition and meaning.

Many people started using it and figured out their own definitions and explanations, while not knowing what the web actually is. Some people now even talk about the Web 2.0 bubble -- again, without understanding what the web is and which part of it is in trouble. And that is important. The bubble of the web 2.0 means that wikis, individual publishing and podcasts are in danger, according to the definition of Web 2.0 given by Tim O'Reilly.

He tried to explain his idea of change that was happening with the increasing availability and use of the Internet which resulted in putting way too many things and ideas under one term which has now spoiled the way we describe and analyze the development of the Web.

I have summarized the rest of my points in the following blog posts - What is Wrong with the Tech Journalism and Usage of the Term ‘Web 2.0’.

You say that "technologies such as RSS have nothing to do with the 'Web' yet are unique to this phase of the Internet", which is false from the very core understanding of the web.

Both HTML and RSS are a form of XML -- a simple mark-up language which is ideologically equal to GML which was used already in 1970.

Internet is the tubes and organized roads (protocols) in which the documents (HTML, XML, music, video) are delivered. It is important to understand that RSS is not special to any specific period in web development (and web 2.0 for that matter), but rather an amazing example of what the Web is in general.

HTTP is the fundamental description for delivering all these hypertext mark-up language documents, as already stated above in the comment by Isaac. All blogs, wikis, rss feeds, javascript (and AJAX, for buzzword lovers) uses HTTP to travel through internet.

More people are discovering and using the web. That is the only important thing that is happening to the Web.

Different programming languages enable people to write software that allow other people create HTML and RSS documents without ever knowing how they look.

All that WordPress or Movable Type does is create an HTML and RSS documents with your blog posts. It is that simple.

There are no magic technologies that make the web work.

Anyway, a good balance between what I do online (my user generated content) and what the experts put out there (in the form of content, news, advertising, portals whatever) is how i want to use the internet, so the term 'web2.0' is so vast and the copmanies lumped under it are so diverse it'd be hard to just with one swoop disregard them all.

Anyway, a good balance between what I do online (my user generated content) and what the experts put out there (in the form of content, news, advertising, portals whatever) is how i want to use the internet, so the term 'web2.0' is so vast and the copmanies lumped under it are so diverse it'd be hard to just with one swoop disregard them all.

it must have been difficult to hear me clearly across the table. Tim's comments are more to the point. What is the definition of Web 2.0? Nobody would know better than Tim, but for me the moniker is getting threadbare and seems to focus backwards, not forward.