Disagreement over bust within Blogspotting

Stephen Baker debates his colleague Heather Green about a coming Internet bust.
Stephen Baker

Heather posted her concerns that a me-too frothiness in the blog-podcasting-vblogging-social network world could lead to a bust. The numbers practically ensure that most of these startups will fail to become self-sustaining businesses.

But will that be a bust? Only if failures lead to a collapse whose effects ripple through a larger part of the economy. Some VC and angel funders will get burned. But that's a given in their business. Plenty of wanna video kings and social-networkers will resume work as waiters or head to B-school (many of them continuing to blog after hours). But even if they quit, they won't be laying off lots of engineers, or cancelling big hardware contracts. Big companies like News Corp that are paying top dollar for social networks could have some unpleasantness on their balance sheets... So their shares drop a few dollars.

Heather says that if many of these startups go under, the investment community could get spooked. But I think there's enough experimentation going on that even if 100 fail, we'll see the promise from the handful that succeeds. (Then the me-toos will go following them...) She has a point about open-source media. Following the failure of Bayosphere, it might be hard to get funding for a big, ambitious project. But smaller scale news blogs like Baristanet are faring fine. And newspapers themselves, in their struggle to survive, will be experimenting madly. And I don't think the idealistic backers of open-source journalism, people like Craig Newmark and Pierre Omidyar, are likely to be discouraged by a few stumbles.

Long story short: I don't see the coming danger. Am I missing something?

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