In June I wrote on this blog that the current web 2.0 phenomenon was not in any immediate danger of entering bubble territory. My reasoning for this statement was that, unlike the shaky underpinning of the first Internet wave, the web-driven media revolution that has been picking up steam during the past several years is looking pretty permanent. For example, New web 2.0 media such as blogs, online video sharing networks and social networking sites, are widely accepted and used on a worldwide basis. As such, I did not think at the time that a new Internet bubble would be bursting in the foreseeable future.

Now I am not so sure. Two recent developments have got me reconsidering my former no-bubble stance:

1.  Facebook – You cannot pick up a magazine or read an online post these days without seeing something about the hottest web 2.0 story, Facebook. The news recently leaked that Microsoft was in talks to invest a sizable amount in Facebook (but still just a small minority position), valuing the company at an unbelievable $10 billion or more. This is for a still very new and essentially untested company that reportedly generates about $150 million in ad revenues a year, almost all based on a deal with Microsoft. Now, I think we all agree that Facebook is a pretty hot social networking property. But, the hurricane of buzz and froth swirling around Facebook has succeeded in catapulting the company into the irrational exuberance stratosphere. Even with the very real promise the company has, I’d say the current obsession with Facebook gets as close to dot.com bubble territory as anything I have seen in a long time. It’s actually kind of scary.

2. The Industry Standard Returns — Now that is bubble inducing! The literal poster child of the dot.com rise and crash is apparently relaunching, first as a website. I guess you can’t really blame the publisher, IDG. There is an insatiable appetite for news, views and gossip on web 2.0 these days, and who better to slake that thirst than our good friends at The Industry Standard. Even so, this seems to me to be pretty close to "jumping the shark" for web 2.0. Can’t wait for those Industry Standard SOMA mixers. I missed them the first go-round.

I have nothing against Facebook and The Industry Standard. I certainly hope they both succeed beyond their wildest expectations (although Facebook CEO/Founder Mark Zuckerberg appears to be going a bit over the top these days in seeming to compare his company and himself to new era Medici’s and DaVinci’s.)

That said, I still think we are letting spin overtake strategy and real business results. We’d all do better by slowing down a bit and stressing the fundamentals as we pursue the truly trans-formative technologies and business/media models that are rapidly emerging today. A little rational exuberance would go a long way to making sure we don’t blow the bubble up again.

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