Web 2.0 = Prices -1.0

This is the question that arises in my mind. I feel like the web 2.0 prices are falling. I mean, in web 1.0 bandwagon, there were more acquisitions and the prices were very high. But now the prices are too low, and there are less acquisitions.

Take the example of del.icio.us and Flickr. We see these guys featured on Newsweek and Time magazines. But they sold their companies for sth btw $20M – $40M.. Writely, on the other, just a few millions of dollars I guess…

If you sold your company at this price, in web 1.0 bandwagon, probably noone would be aware of you. But now you’re featured in wordwide magazines, your photos are in the cover of these magazines!

In my opinion, this has several reasons:

1) It’s much easy now to build a startup. In the old times, there were less resources, the hardware and the software were more costy; so these things were a barrier to entry in front of starting a startup. So this means less competition and higher prices.

2) More importantly, in the old times, everyone were threatining each other. Everyone could replace other, and become “the Yahoo”. So there were fuzziness in the industry. But now everything is clear; it is a known fact that, say del.icio.us, would not be able to replace Yahoo. The industry is OK with 5 giants: Yahoo, MSN, Google, Amazon and eBay. Now if you don’t sell your company for $20M to one of these giants, these giants can do a product similar to yours in a few months.