August 1st, 2007
The third Web wave--two degrees of separation
During a panel with venture capitalists at the AlwaysOn Stanford Summit O7, Roger McNamee, co-founder of the private equity firm Elevation Partners, gave his view on the latest Internet driving force–the era of social networking.
“Predicting the future is really an unproductive activity,” he said. “What’s going on in the [Silicon] valley now is the beginning of the third wave of the Web–aggregation, indexed search and now two degrees of separation, trusted references from the people you know and they know. I have no idea about the business models or how long it will take. I am just certain it will be huge.”
MySpace, Facebook, Bebo and the dozens of other companies are building businesses and Google, Yahoo, Microsoft, IAC and other large brands with millions of users cannot avoid the new colonization of the Web built around a social graph.
While the business model–mostly weakly targeted ads for now–isn’t fully evolved, venture capitalists are pouring money into the services. McNamee cited one of his laws: “In the battle between fear and greed, fear is temporary and greed is permanent.” He added, “Wall Street will fall in love with it eventually.”
Regarding the current state of the market, McNamee said, “We haven’t come anywhere near bottoming out.” He added that before their is a huge bull market run a ton of private equity, venture capital and public market funds will be “vaporized.” I guess he does spend some time predicting the future.
Dan Farber, editor-in-chief of CNET News.com, has more than 20 years of experience as an editor and journalist covering technology. See his full profile and disclosure of his industry affiliations.
