Yesterday I read two articles that suggested Web 2.0 growth is stunted, if not actually in danger of stopping altogether. Both cited a report from Dow Jones VentureSource. According to the report, even though nearly $1.34 billion was invested in 178 Web 2.0 deals last year, Facebook -- Land of the SuperPoke -- accounted for about 22% of them.
VentureSource's numbers also pointed to a slowdown in the growth of Web 2.0 deals.
During the period of 2002-06, deal flow doubled each year. However, 2007 saw a smaller percentage of deals -- an increase of only 25% (178 in 2007, up from 143 in 2006). To add fuel to the speculative fire, most of this growth took place outside of the Bay area, well-established home of Web-related investment and innovation.
Should Web 2.0 advocates, pundits, and prophets be worried?
Bloggers and analysts alike have been ringing the death knell of Web 2.0 almost since it was first christened. Sites like Twitter, Digg, and Facebook are often singled out for their success in driving traffic, but inability to make any real profit. Other critics offer more unique reasons for a possible Web 2.0 collapse.