Friday, February 10, 2006

The Voltron method of Web 2.0 scaling

The excellent alarm:clock blog suggests what it calls a Web 2.0 roll-up:

There is way too much excitement over $12M acquisitions of modest Web 2.0 start-ups by Yahoo and Google. So why not make a run at creating another portal? After all, it wasn't that long ago that Alta Vista and Infoseek were hot portals - and there will doubtlessly be another big-time portal launched in the next few years.

A Web 2.0 Roll-up might start with Technorati for blog search, Rolyo for personalized search, and add features like Zimbra's calendar, a video search like YouTube or Revver, an IM app like Meebo, a comment tool like Digg, plus other doo-dads that you might find on the TechCrunch Index.

It's a nice idea. The theme behind it - scaling to a level where you don't need to get bought out by GEMAYA but can in fact compete with them on a level playing field - is a worthy one. It would be interesting to see how many users such a venture would have after removing duplicates from their united databases, since I suspect there is a lot of crossover already in user bases.

There are several things militating against such a move. First, that all of these companies are run by individualistic entrepreneurs who would not want to give up 100% practical control without a big liquidity event. Second, a lot of Web 2.0 companies have significant VC investment, and I seriously doubt that VCs would want to dilute their stake to be one of 20 or more ownership minnows, even if it might be in a larger entity. Third, even if a bunch of these startups lock together Voltron-style to form a cohesive whole, their combined user base is still going to be a drop in the ocean compared to the major portals. Go to and compare to any of the abovementioned sites: the graph of the smaller site barely gets off the X axis.

The only way I can see this happening is not by equals joining a collective, but by a moderately successful startup mopping up the assets of failures. But even then they're competing with GEMAYA, as evidenced by Yahoo buying up SearchFox's assets. It's a lovely concept, but it's hard to see it happening in practice.


Blogger redbarren said...

works well on a regional basis too. the 2.0 portal strategy. integrating different code bases, membership systems, and so on would be very tricky - better to do what barry diller and rupert murdoch are doing : own a strategy (eg user generated content under 30 = fox / intermediary for high involvement ecommerce purchases = iaci) the other key is buying at a low price. low cap public listed internet companies locally are planning to do this strategy btw...

3:28 pm, February 10, 2006  

Post a Comment

Links to this post:

Create a Link

<< Home