Web 2.0 Companies Waiting to go Public

    January 16, 2008

At this point, we really haven’t seen a major Web 2.0 company make it through an IPO.

We’ve seen YouTube gobbled up by Google, and MySpace snagged by Rupert Murdoch’s News Corp. To date, they remain the companies that have truly defined success in the evolving Web 2.0 era.

But there are some major Web 2.0 players out there, perhaps waiting for a shot at an IPO. FaceBook, LinkedIn, Spot Runner and some others immediately come to mind. But what would going public really mean for these companies and, more importantly, what would it mean for investors who want to grab a piece of one of these companies? Obviously, this is pure speculation at this point and we’re only now starting to hear some of the valuation numbers associated with the venture capital infusions that the major Web 2.0 companies are getting.

And amidst all of the excitement and skepticism, I can’t help but be reminded of a magical time not too long ago; a time when business models meant little and the “global reach” of the Internet was going to allow every eager start-up to “make it up on volume.” There were voices of opposition during that time, but they were often unable to be heard over the din of corporate ping-pong tournaments and the unbridled glee of greenhorn business owners with millions of venture capital dollars at their disposal. We all remember how that ended.

But, in fairness to the Web 2.0 phenomenon, I think the experiences of the dot-com implosion have made us all appropriately wary of over-hyped Internet companies. As a result, we usually don’t hear too much about Web 2.0 companies until they are actually making money. Granted, most of the Web 2.0 money is ad-based, which is a little scary. And most of that advertising money is in one way or another tied to Google and its unrivaled dominance of Internet search and advertising. But at least money is being made and the strength of the brands mentioned above would seem to indicate that they are going to be difficult to supplant as industry leaders in the foreseeable future.

Will Web 2.0 companies have enough momentum to carry them through an IPO and establish themselves as successful publicly traded companies? Only time will tell.