Jim Moore’s blog: Innovation, Strategy, Public Policy

Dave Winer on three investing philosophies for Web 2.0

December 22nd, 2005 · No Comments

Interesting post by Dave Winer on Web 2.0,
two models of how to pursue it.  I think RSSI is in the number two
camp, I know we are not in the number one camp, and I hope we are not
in number three.  :)

BTW I don’t really understand the number one camp, honestly.  Excerpt from Dave:

1. Tim O’Reilly and John Battelle and their VC friends. What they’re
doing is slicing up Google’s PE ratio, tiny slivers of it, and
apportioning it to small companies they either buy stock in (that’s
Tim’s strategy) or consult for (that’s Battelle). Basically the updraft
from Google’s stock is so strong it can turn those tiny slivers into
tens or hundreds of millions of dollars. There’s nothing theoretical
about this, they’re making the money, but they’re not making a big deal
about it so it’s easy to overlook. You can see this reasoning in a
recent Battelle post
about how Google is doing a second IPO by investing $1 billion in AOL.
He lays it out openly. It’s a good business model as long as Google’s
PE ratio stays high.

2. There’s the Mike Arrington version of Web 2.0, which he explained snarkily in his traitors memo,
but he really believes it, and more power to him. I adore Mike, learn a
ton from him, and am willing to humor him ad infinitum. That’s why when
I debunk #1, he gets caught in the cross-fire, but I don’t resign from
the workgroup. I kind of
like the idea that we’re appropriating the marketing slogan that makes
the carpetbaggers so rich. There’s a certain kind of justice to that.

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Tags: Economics and cybenetics

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