May 4, 2006 8:29 pm US/Pacific
Second Dot-Com Boom On Its Way?
by Sue Kwon
(CBS 5)
The dot-com bust was six years ago, but now Silicon Valley is again giving birth to new Internet startups. The question is, are we heading for another boom or Internet bust?
The official unveiling of a new Silicon Valley startup, Genius Inc., is reminiscent of the dot-com parties of the late 1990s, just not as extravagant.
It fits the San Mateo company's more Zen approach as it joins hundreds of other new Internet sites emerging in what's being called Web 2.0, the web's second version -- a new Internet boom.
"Before, it's irrational exuberance. Now, it's rational exuberance because companies like Genius are focusing on the products, and those products sell themselves," said Genius Inc. CEO David Thompson.
Thompson explains the Genius Internet tool uses email and instant messaging to help salespeople track a customer's activity and offer more tailored service.
It's that more in-depth, personalized Internet experience Michael Arrington is looking for.
"It's more about interaction with people and entrepreneurs who are passionate about what they are doing as opposed to just going for the money," he said.
Arrington brokered many dot-com deals in the 90s. The attorney-turned-blogger now tracks and reviews Web 2.0 companies for his site, Techcrunch.com.
Some standouts: YouTube, a video share site, and Riya, a photo search tool using facial recognition technology.
"A company called Newsvine allows instant messaging on each news item so people can interact real time and talk about a news item," Arrington said. "It's cool."
Arrington says this time around, entrepreneurs are spending their own money building products and signing up customers. Venture capital dollars are hard to come by.
So don't expect to see money wasted on expensive ads with a sock puppet mascot.
Burlingame-based MeeVee launched less than a year ago with a simple office pizza party. It's now creating a buzz with its social networking website focused on TV.
"Users can review content they find and interact with each other, and there will be more to come," said MeeVee CEO Michael Raneri.
Unlike the old dot-com days, MeeVee will soon turn a profit.
Another sign of a comeback: venture capitalists invested over $800 million in Internet deals in the first few months of 2006. That's an 11 percent increase over last year.
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