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| Attention Web 2.0 Start-Ups: Party May Be Ending |
| Friday, March 16, 2007 |
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 Who says Wall Street firms are always bullish? According to Reuters, Merrill Lynch published a report today suggesting that housing market woes could drag the economy into a recession and that, if it does, investors can expect a drop in the S&P 500 of at least 30% from the peak. Even if there is no recession, and the market just does a head-fake, we should expect a drop of about 20%.
How will a public-market stumble affect Web 2.0 start-ups? The same way the market crash in the fall of 2000 did, albeit to a lesser extent:
Money will get harder to raise. (Because VCs will be feeling pressure from their clients, and exit valuations will be lower).
Financing and exit valuations will be lower. Because the stocks of acquirers and comparably public-market companies will be lower.
Investors will get impatient for start-ups to develop businesses instead of "products" and "communities."
The growth rate of online advertising will slow dramatically. In tough times, advertising is one of the first expense lines to get cut (by big businesses and small). What's more, some start-ups that are currently buying advertising will cut back or cease to exist.
In short, being a Web 2.0 entrepreneur or employee may soon get more difficult and less fun. Hit the bids while you can! |
posted by Sam @ 8:33 AM  |
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| About Me |
Name: Sam
Home: New Delhi, Delhi, India
About Me: I am a 29 year old Web Analyst from Bihar, INDIA. I started my career as a part time Lab assistant in Webcom Technologies, USA in Pitampura at an age of twenty while in First Year. I am fortunate that my first experience in professional world was in such a friendly and informal environment.
I have taken a keen interest in internet technologies since 1999 when I began creating websites for friends and family during my time at school. Using a trial and error method I quickly mastered HTML and using my existing graphics skills and eye for detail I began developing the foundations to my career. from last 5 years, I took the position of Project Manager at V-Angelz Technologies.
Since being in this position I have had the chance to further improve on my Usability, Accessibility, SMO and Business Development skills by producing several dynamic websites for the group and taking sole responsibility for the re-building and on-going development of the CMS, ERP and CRM System.
See my complete profile
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