The Web 2.0 World is Skunk Drunk on Its Own Kool-Aid
This is a sad time for the web. It's as almost somber as the time just before the last bubble burst in 2000. I was working in PR with dot-com startups at the time and the way I feel now is how I did back then. I wish I didn't, but I do.
Context & Ripple Effects
Skepticism about Web 2.0 is not new — naysaying hit an all-time high back in October 2005, when Read/Write Web, Wired News and The Register all published within days of each other arguing the label was more hype than substance, and Wired's 'cracks start to show' piece framed early business-model doubts. What changed by 2006–07 was who was talking: Steve Rubel, whose Micro Persuasion blog had built an audience on advising companies how to ride the social web, had already laid out the economic conundrum of free services without clear revenue in August 2006.
This October 2007 post goes further than those earlier critiques because it comes from inside the ecosystem's promotional machinery rather than from outside skeptics. Coming months after an Alexa data error triggered a very public crisis of confidence in traffic metrics on Valleywag, Rubel's comparison of today's mood to the pre-2000 dot-com stretch lands as a warning from an evangelist, not a troll.
First-order effects
- Rubel's own consulting position shifts: a PR adviser whose practice depends on corporate enthusiasm for Web 2.0 is now publicly telling clients and readers the sector is 'skunk drunk on its own Kool-Aid,' which raises the credibility cost of unqualified social-media pitches across the advisory world he writes for.
- Startups pitching attention-based valuations face a harder narrative environment, since one of the movement's most visible advocates has just endorsed the pre-bust analogy.
Second-order effects
- Investors and acquirers reading insider doubt will press harder on revenue models, echoing the monetization questions Rubel himself raised in his 2006 economic-conundrum post — free consumer services with no pricing story become the specific target of diligence.
- Rival commentators get cover to escalate: the 2005 naysaying wave was dismissed as outsider grumbling, but with Micro Persuasion joining in, the bearish camp now includes the people paid to be bullish.
Third-order effects
- If the pattern holds, the industry is entering the familiar phase where the movement's own promoters become its leading critics — historically the point at which funding standards tighten and the distinction between durable platforms and Kool-Aid-era ventures gets sorted out.
- The recurring five-year rhythm visible here (2005 outsider skepticism, 2006 economics critique, 2007 insider bubble talk) suggests Web 2.0 commentary itself is cyclical, with each hype wave producing its own corrective literature.
The trend: Web 2.0 discourse is moving through the classic hype-cycle turn where the movement's own evangelists begin voicing the bubble warnings outsiders first raised in 2005.