Pragmatism or Cause for Concern?

The Financial Times has story – Web 2.0 fails to produce cash – that’s a bit of a head-scratcher.

It includes these quotes:

“There is going to be a shake-out here in the next year or two” as many Web 2.0 companies disappear, said Roger Lee, a partner at Battery Ventures.

“If you look at some of the valuations, you wonder what fantasy of revenues they’re based on,” said Mitchell Kertzman, a partner at Silicon Valley venture capital firm Hummer Winblad.

Should we take these statements as signs of trouble on the horizon? Or are they simply people trying to be pragmatic about an environment that is verging on frothy but not quite there enough for many people to be that concerned….yet?

Part of the unwillingness for people to climb on the bubble bandwagon may be because there’s still so much excitement and enthusiasm about all the new services and applications being launched.

With development, distribution and marketing costs declining, and IPOs non-existent, it makes the current dot-com landscape so much different from dot-com 1.0 when costs were raging and IPOs were a dime a dozen.

More: Andy Beal has some thoughts on the FT article, as well as some insight from his startup, Trackur.com.

Technorati Tags: Venture Capital, Web 2.0