Bubble 2.0 and Flock

Why is getting acquired all of a sudden a bad thing? That seems to be the new battle cry. Lots of folks are interested in the money side of Web 2.0. Charlie Wood, a great chap who I met at the Web 2.0 Conference, has created a blog to follow it all called, what else, […]

Why is getting acquired all of a sudden a bad thing? That seems to be the new battle cry.

Lots of folks are interested in the money side of Web 2.0. Charlie Wood, a great chap who I met at the Web 2.0 Conference, has created a blog to follow it all called, what else, Bubble 2.0. He’s not as cynical as you might think: he uses the tagline “Please God, just one more bubble”! and has said on one occasion that the schizophrenic nature of the blog “swings wildly between abject cynicism and irrational exuberance…”.

Getting acquired hasn’t always been a bad thing. I worked on a failed dot com startup and getting acquired was one of our primary goals. I didn’t think it was a bad idea then and I don’t now. In fact, my buddy Bill is still working on it at Labprints, and he’s providing real value to professional Wedding photographers (i.e. he’s making a profit). He decided to make a decent company out of it the day I left, for some reason.

What does seem to be a bad idea is to think about getting acquired without providing any value first, either to users or anybody else. And this is where the problem lies, I think.

What we’ve seen recently are companies that think that providing social software for the sake of it is a great way to build value. Problem is, that providing social tools in software doesn’t actually make people use it. But it can be lucrative, as long as you’re talking about millions of users. If you can’t generate a user base like that, then your social software isn’t very social, is it?

And then there’s Flock, which bills itself as a social browser given its built-in Del.icio.us and Flickr integration. Flock has been seriously maligned in the recent weeks following their beta launch because people don’t see a business model behind their software. Folks have been upset that they received venture funding (to the tune of a couple million dollars) because they see Flock as nothing more than another advertising front, which it very well might be. Given that advertising is powering the most exciting company on earth, this might not be a bad strategy.

But then there’s the attention factor. Bart Decrum, CEO of Flock, in response to the negative vibes, points to referral fees from Google and Yahoo as a revenue stream. He points out that Opera is now free because of their ability to generate enough referral fees in this way. And the number of $30 million has been floated for the amount of cash that Mozilla makes off of its referral deal with Google. (A Mozilla/Google branded Search page is the default home page in the Firefox browser).

In an attention economy, some, but not all, of the rules have changed. I’m not saying that Flock is going to succeed or that there isn’t a bubble, but if you can get attention and give attention better than other folks, you’ve got power, and you might just be lucky enough to get bought out at a rediculous price.

Unless, of course, you wanted to work your whole life.

Published: October 27th, 2005

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