Information Madness

The "dot-com bubble" was a speculative bubble covering roughly 1995–2001 during which stock markets in Western nations saw their value increase rapidly from growth in the new Internet sector and related fields. The period was marked by the founding (and in many cases, spectacular failure) of a group of new Internet-based companies commonly referred to as dot-coms. A combination of rapidly increasing stock prices, individual speculation in stocks, and widely available venture capital created an exuberant environment in which many of these businesses dismissed standard business models, focusing on increasing market share at the expense of the bottom line. The bursting of the dot-com bubble marked the beginning of a relatively mild yet rather lengthy early 2000s recession in the developed world.

The internet back then was not mature enough but now the internet is much much mature and stable.

Lets talk for a moment about the current giants, Google, Yahoo and MSN. All three are specializing in their own fields. competing for the first place in the internet world. And there are sites like digg.com, myspace.com, youtube.com which offeres different kinds of services whether it be a video sharing, social networking or bookmarking sites.

In this cutting edge technology, if you have something unique, you would be able to sell it within few hours. And thats what happened with digg.com, youtube.com and myspace.com. There are many more sites which offered their unique service and became famouse overnight.

Just to give you a small example for uniquness, I created this april fool hoax this year with a title "Aishwarya Rai Wardrobe Malfunction" (Visit the link if you want to see what I am talking about) and within 2 hours I got 1000 visitors to my website. I didn't copy this from anywhere but was my own brain child. And the link became so famous that now there are so many blogs, sites link to my web page.

So the point is uniquness. But what happens when you start a new venture based on some existing product? Do you think its going to work?

So many new websites are poping up everyday in India. I dont think they have anything unique to offer. Lets take a look at few sites

• Video Sharing for India - I dont know which one launched first. But within no time, you have AapKaVideo, MeraVideo, ApnaTube, VideoDubba, punjabeetube
• After digg.com there’s HumDigg, IndianBytes, NewsCola, PutVote, IndiaMarks.
• And the same goes for social networking sites. After the success of Orkut now we have -- Jhoom.in, minglebox.com, yaari.com, fropper.com, SaffronConnect.com, rediff Connexions, hangoutwith.com, onlineslambook.com and other thousands.
  

This shows a Herd mentality. There is a nice article about "Herd Mentality and Indian Startups" on startupdunia.com.

Even for information on "Indian Startups" there are atleast 15-20 sites. e.g. startups.in, webyantra.net, contentsutra.com, startupdunia.com, indianstartups.net are just few to name them.

Many of these startup sites are getting millions of dollars in investment. And lot of these sites are initially planning to creat a community. The above link from the professor about last dot com failure mentioned few topics that caused the dot com failure. Two of them were "Doing the same thing" and "Building Community not clientele".

Recently Minglebox.com received $7 million in funding from Sequoia Capital. Kavita Iyer (Wife of Sandeep Singhal who is MD of Sequoia India) is the CEO of MingleBox.com. From ContentSutra.com MingleBox will get revenue from advertising and branded communities later once they get established.

Sequioa India has also funded few more dot coms like Guruji.com (Indian Search Engine) which recently launched their services in Telugu.

And not only local dot coms but now International dot coms are also rushing into India creating a tremendous competition for Indian Websites. Google, Yahoo! and MSN already exist in India and now AOL is spreading it's wings. They are planning to spend Rs. 10 Crore in advertisements/marketing. Do you think AOL has chance to get it back from India compared to what they are planning to spend?

And these are just my high level thoughts about current internet industry. I just touched Indian Internet Industry. I am sure there are similar startups/trends in other countries as well. I am not an economist or market watcher but after looking at this Herd Mentality in India, I ask my self a question, are we heading towards another dot com failure in near future?