Content April 2007

The Web 2.0 Bubble

Why the social-media revolution will go out with a whimper

My broadband connection went down earlier this year, and I was briefly forced to use a dial-up Internet service provider. I considered which of the icons to click on my desktop: “Free 6 Month AOL Membership,” or “EarthLink,” or “NetZero First Month Free!” I went for the 30-day free trial on EarthLink, and up popped a headline-news crawl. This provoked something of a flashback to 1997, when this innovation—basically, information you’ve requested being automatically delivered to your computer—was called “push technology” and was going to transform the experience of cruising the information superhighway. Wired magazine, at the very apex of its hyperbolic frenzy, infamously pronounced: “Push!” “The Web browser … is about to croak. And good riddance.”

In the Web hype-o-sphere, things matter hugely until, very suddenly, they don’t matter at all. Thanks to the unprecedented growth of MySpace and Facebook, “social media” matters hugely right now, but it is likely only another in a long string of putatively disruptive, massively hyped technologies that prove just one more step in the long march. Like “push,” “social media” is a functional advance pimped out as a revolution. Web 2.0, a term used somewhat interchangeably with social media, carries the not-so-veiled suggestion that everything else is merely 1.0—that is to say, Cro-Magnon. Really cool people now like to talk about Web 3.0. The pedant might note that the Internet, axiomatically, is all social media, but for the purposes of this discussion, let’s say that social media includes any digital environment built on the contributions of and interactions among people—or in the case of dogster.com, their dogs. Or hamsters. That would be hamsterster.com, where you can learn that an Oswego, New York–based hamster named Pistachio, member since January 8, 2005, likes jumping, climbing, and eating broccoli.

Social media has been around since the dawn of the Web. Remember GeoCities? The key innovation that launched the current vogue was a simple one: networking users and allowing them to interact the way we do in real life—or wish we could in real life. People have been able to blog for years. More recently, they have been able to upload photos, video, music, and so forth. Sites like MySpace connect these users through an ingenious networking system, allowing them to select whom they want as “friends” and creating a virtual experience that enables members to ping through hundreds of profiles in a matter of minutes. You can sort, rank, drop, and “poke” these friends, just like in high school, only virtually—though MySpace has clearly yenta’d more than its share of real-world hookups. Networked sites like the photo-sharing and -tagging Flickr have exploded onto the scene, boasting growth rates comparable to those in the Web’s early days. As a result, you can see “user pages,” complete with provocative personal snaps, blogs, lists of favorite books, music, movies, whatever, and banks of friend photos, popping up pretty much everywhere you go on the Internet these days.

On VampireFreaks.com, goths can start their own “cult,” or join the “Poetic Death” cult or, barring that, the “Tim Burton” cult. Real-estate agents have the evocatively titled ActiveRain.com, where Merrick, Long Island–based Geri Sonkin, thanks to her enthusiastic participation in the network, has amassed 36,284 points and placed 63rd in the rankings. Snapvine.com prompts teens to socialize using prerecorded phone messages instead of typed comments. “Can I pimp out my voice players?” the FAQ page asks. “Yes!” OMG!

The wave, inevitably, has reached the more hipsterish suburbs of Corporateville. Doc Martens’s new social-networking site, Freedm2.com, encourages you to “make art, make fun of art, shock, express yourself, entertain.” A semiliterate, dissociative, generationally correct vagueness permeates everything. “Do whatever it is you do,” the site urges, “and the people who are already out there doing it, will make the best stuff happen.” I counted a few dozen users during my most recent visit.

The USA Network’s very expensive-looking ShowUsYourCharacter site is designed to deepen the experience of viewers of the top-ranked cable channel, recently rebranded with the tagline “Characters Welcome.” The year-old site, an apparent effort to transmute the brand across the reality divide, allows fans to present themselves as “characters,” just like the people they see on TV. When I last looked, the top-ranked woman, a cheery-looking blonde named Captain Lolo from Tulsa, Oklahoma, had 4.45 stars out of 5—thanks to 12 votes. Those 4.45 stars allowed her to narrowly beat out the fourth-place female, a mixed-breed dog from Cornelius, Oregon, named Tagger67, who scored 3.4 stars with 303 votes.

According to VentureOne, a research firm, nearly $500 million in venture- capital money was pumped into social-media companies in the first nine months of 2006. “There are some similarities between the current ‘bubble’ and the last one that burst in 2000,” Todd Dagres, co-founder of venture-capital firm Spark Capital, told The Wall StreetJournal. “Lots of incomplete and underexperienced teams, business models based more on eyeballs than cash flow, and a rash of incremental and ‘me too’ deals.” As in the last bubble, sites blossom out of nowhere and quickly fade. The average user of Xanga, the buzzy social-networking site of the early Aughts, spent 15 minutes on the site in December, down from around an hour and a half in October 2002. Friendster, the massively VC-funded social-networking service whose demise is being hurried along by the more free-wheeling MySpace, topped three hours per user last February, only to drop to a quarter hour in December. Right now, the cool kids, especially those who like emo music, are flocking to Buzznet.

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Michael Hirschorn last wrote about the latest wave of innovation in the digital-music world.

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