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Dvorak wrong again (no surprise)

As as everyone probably already knows the famed technology pundit Dvorak wrote a blurb about how web 2.0 is a bubble due to pop one day. My analysis:

Dvorak is completely wrong here as he is wrong about most things. He is an old toad who has almost never made any correct predictions and cant form a single coherent piece of analysis and is probably exhibiting symptoms of early-onset Alzheimer’s.

For one, web 2.0 isn’t a bubble because in order for it to be a bubble it would have to draw in much more capital. The original web 2.0 bubble drew in BILLIONS of dollars from millions of investors. This included retail investor with etrade accounts to VC firms. This isn’t the case with web 2.0.

Second, most of the web 2.0 companies and all of the popular ones are 100% profitable and sustainable while bubbles are characterized by unsustainable business models. Facebook and Myspace draw hundreds of millions dollars in revenue and millions in profits.

In addition those sites (as well as all web 2.0 sites) have very little infrastructure. No warehouses or distribution centers as in the case of the ill fated webvan.com, pets.com and furniture.com. All that is need to run a web 2.0 company are a few programmers, a server, and some form of advertising. Thats it. Bubbles implode when revenues are unable to cover infrastructure costs , which isn’t the case.

In conclusion, Dvorak’s tirade should be taken with a gigantic grain of salt. His analysis and reasoning is completely flawed. In the years to come Dvorak influence in the industry will fade as he becomes irrelevant.