Jason Liew

Scan-reading through my previous month RSS feeds, a post by Coolz0r gave me some thoughts about web 2.0. This is the Top Ten Belgium blogs list made by B.L.V.G based on tools provided by Business Opportunity Weblog. Is this the prologue for next dot-com bubble?

Imagine you are writing blog for fun, and somebody tells you that your blog worth 800,000 dollars for its business opportunity.

According to VentureOne, a leading corporation of capital and private equity research, stated: “In the third quarter, venture capitalists poured $394 million into 51 Internet companies that cater to individuals online, up from just $116 million in 17 companies during the same quarter two years ago”

How a web 2.0 bubble burst?

For business owners and bloggers:

1. Due to optimism in web 2.0 technology, their companies are overvalued for their future profitability.

2. When they are valued highly, they tend to feel more financially secured. They tend to take up more credit spending, such like mortgage and credit cards spending.

3. This is a dangerous wealth effect, because their wealth is majorly based on something abstract and intangible—the websites, rather than traditional business models.

4. When the truth is revealed later, that web 2.0 is not as GREAT as investors expected, the value of those companies crashes.

5. Due to the diminishing wealth in the burst of bubble, and the increasing debt of previous credit spending, they end up in bankruptcy. THE END

For share market investors:

1. Due to optimism in web 2.0 technology, the web 2.0 companies’ share value rises sharply and consistently.

2. The investors note the fast increase in value and decide to buy in anticipation of further rises, rather than because the shares are undervalued.

3. The large increment of investment causes many web 2.0 companies are grossly overvalued.

4. When truth is revealed, all investors lose confidence, and throw shares back into the market, the price of web 2.0 company shares crash.

5. Most investors can’t sell shares on time, thus end up with shares that worth nothing. Their wealth are gone with the burst of web 2.0 bubble. THE END

Tags: Business, Blogging, Investment, Share+Market, Web+2.0, Dot-com+bubble