Profits? Who needs profits if you're living in Web 2.0?
[ Music ]
>> Charlie: You know that [inaudible] saying that profits should matter to tech start-ups, well apparently to some in the Web 2.0 episystem,
not so much. Welcome to the CNET News Daily Debrief I'm Charlie Cooper here with Webware's Editor Rafe Needlemen. You had a conference
last week, a very high-profile conclave of Web 2.0 hotshots and what recession?
>> Rafe: You wouldn't know it. I was at the Web 2.0 Summit here in San Francisco, I don't know, hundreds of people there, the rooms
were packed, a lot of great talks, we had political commentary.
>> Charlie: Al Gore showed up.
>> Rafe: Al Gore was there, Arnett Huvington [assumed spelling], Mayor Newsome [assumed spelling], it was a very upbeat event, people
were, ya know, doing their Web business. And then we had people on stage like Mark Zuckerburg [assumed spelling] --
>> Charlie: Of Facebook.
>> Rafe: of Facebook, and Ed Williams of Twitter.
>> Charlie: Well, let's talk about that. About a month or so ago, I believe Ron Conway [assumed spelling] of Sequoia [assumed spelling], with a big
>> Rafe: Ron Conway and Sequoia.
>> Charlie: Ron Conway and Sequoia put out a note arguing that times are tough and probably weren't not gonna see a rebound any time
soon, bottom line, hunker down. But in listening to talks given by both Williams and Zuckerburg you get the impression, at least for
these folks, profitability in your term, it's not as important as other things.
>> Rafe: They seem to be surprisingly happy about the direction their businesses are going and considering the input that everybody
else is getting about hunkering and delaying expansion and all that stuff. Williams gave the talk about Twitter answering questions
about where the money is. Well, ya know, we think the service is valuable and companies will pay for it but he was really light
on specifics. Zuckerburg with Facebook was talking about international expansion, and Facebook has revenues, but again, it was more
of a down --
>> Charlie: As well as a fed investment from Microsoft to tie them over.
>> Rafe: Yeah
>> Charlie: Did you get the impression that it was more of a question of these two, ya know, established, more established Web 2.0
companies talking about their specific niches rather than something that could be amplified for the Web 2.0 episystem at large.
>> Rafe: I see younger CEO's, CEO's of younger companies being much more focused now on their path to revenues and to profitability.
Companies that have traction that are the Xerox's, the household names of the Web 2.0 like Facebook and Twitter, they seem to be thinking
that, ya know, they're okay, they can weather, they're hunkering isn't going to be as bad for them, that the advertisers will fly
towards the audiences and that these companies have the audiences. But then again Jerry Yang [assumed spelling] of Yahoo gave a, I think
a pretty poor showing at this event in trying to reassure people that Yahoo is on a track towards to turn around its fortunes and there
was no sense that Yahoo is pulling out of the hole it's in right now, and they just -- they keep getting hit, ya know, Microsoft
won't buy them and Microsoft said it again, they won't buy them.
>> Charlie: At least not the price -- the current price of the stock. How much to make of this I don't know but the party scene, I
attended a few parties last week and they were rockin' as if it were 1999.
>> Rafe: Yeah, they -- I don't know why everybody is so happy. People are saying that, look this isn't our recession, this isn't the
left coast tech recession it's the entire economy, we're just along for the ride, if it affects them it affects us so it's not really
our fault. Maybe there's a sense, maybe like the last bubble, we didn't cause this one but it will affect us and it will affect the
tech economy and I don't know why the tech people are so upbeat when we're going to see advertising take a hit, consumer spending
take a hit, and all the services that support them, I mean everything's going to take a hit. I don't know why the misery isn't trickling
down to the start-ups.
>> Charlie: Optimism
>> Rafe: I guess if you have to be, if you're an entrepreneur you have to be optimistic, you have to believe that you have a service
that is better than everything else out there and that paying for everybody else means just that you can focus more on getting the
audience that you need.
>> Charlie: It's the other guy that's in trouble, it's an opportunity for us, thank. On behalf of CNET News I'm Charlie Cooper.
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