Bubble or Boom, Silicon Valley Is Crazy Again

At last week's Web 2.0 Summit here in San Francisco, there was a dizzying array of product announcements, number-dropping (and name-dropping, natch), and the launch of more than a few promising start-ups. 

Dubbed "Points of Control," the conference was its usual whirlwind of activity, but the centerpiece of the three-day event was a conversation between Kleiner Perkins' John Doerr and Union Square Ventures' Fred Wilson.  While one described the current environment of venture-backed innovation as a "boom" and the other a "bubble," both agree something big is afoot.

Doerr said that we're in the middle of a huge third wave of innovation and, moreover, that today's entrepreneurs are better and the ideas are better than ever before.  The combination of smart phones and the social graph, he said, and the friction-free way that consumers can behave within these environments makes this time more exciting than any previous one.  Wilson added that nothing great is ever created without irrational exuberance.  



Though all this renewed exuberance is or will be good for everyone, it seems clear it will be particularly good for advertisers.  As I've said in previous columns, I also see opportunities for search marketers, both in terms of the work we do today and in the ways in which the scope of our work will shift as a result of so much innovation.

Google alone is nearly impossible to keep up with. If Google announces one more new product, innovation, or feature introduction, my head may explode. My colleague Kaila Colbin wrote compellingly in this space about Google's growing omnipresence, and last week Gord Hotchkiss showed how the right rail of ads on search results pages may be becoming extinct, among other seismic shifts in Google's core search product.  And yet, amazingly, these seem only to be the tip of the iceberg. 

Doerr said repeatedly in his talk that Amazon, Google, Facebook and Apple are the drivers of the Internet (Amazon is the cloud and commerce; Google is search, productivity and mobile; Apple is mobile, entertainment and apps; and Facebook is the social graph.)  But because Google drives search, and its search results increasingly integrate commerce, entertainment and the social graph, it is in the cat-bird seat. 

On top of this layer of Web infrastructure are a growing host of important players in their own right.  Consider these numbers: 

  • Twitter is generating about $100,000 per day via its "Promoted Suite" line of advertising products. 
  • LinkedIn is adding one new member per second and has 85 million users (which would be a more impressive number if Facebook didn't have more than 500 million...) 
  • Yahoo serves 18 billion ads per day.
  • The Zappos CEO has only three pairs of shoes.
  • Zero: Microsoft's new Kinect is very likely sold out for the holidays even as I write this column. 
  • More than 420 million people in China now have Internet access, and 99% of them use Baidu. 
  • In about five years, most households will have some form of IPTV. 
  • Zynga's Frontierville has 650,000 same-sex marriages (oh: and 320 million people worldwide have played their games.)  And they're just three years old, a billion-dollar company and profitable.

    The big, overarching take-away message from Web 2.0 Summit, however, is that mobile is a monster market trend, as Doerr put it, and is just getting started.  If we're in a bubble / boom, it's because everyone is rethinking every service and every function in an increasingly networked and mobile economy.

    Another trend is the war for talent.  While the rest of the country may be suffering 9% unemployment, employers in the Bay Area and New York are struggling to find and acquire talented, experienced people to work in proliferating, fast-growing venture-backed companies. 

    It's clear that with a computer in nearly every person's pocket, combined with a growing social graph, all aided and abetted by search, the opportunities for advertisers -- and everyone -- are more abundant than ever on the booming, bubbly Web. 

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