TechWeb's Internet Evolution Uncovers Worst Web 2.0 Investments

Targeted advertising, social networking, video, search, and self-publishing/social publishing are the biggest money pits as investors and VCs chase the Next Big Thing(s)

NEW YORK, Oct. 16 -- Whether they're being groomed for acquisition or poised for long-term profit as standalone entities, Web 2.0 startups continue gorging on investors' millions, according to a new report today from Internet Evolution. Despite the confusion of the current economic climate, "Web 2.0's Biggest $inkholes" (http://www.internetevolution.com/document.asp?doc_id=165412) highlights key areas where VCs and angel investors think big Web 2.0 payoffs await:

  --  Targeted advertising: JellyCloud couldn't hack it and $11.5 million
      later went belly up; Lotame is staying afloat with its $28 million
      purse.

  --  Social networking: All-purpose inbox company Xoopit is working on a $6
      million round, while Orgoo is on indefinite hiatus; AOL's $850 million
      for Bebo ended up being largely a write-off for the company.

  --  Video: Lots of money's chasing the desire to be the next YouTube --
      too bad most of the hosted content is porn; Trooker and others are
      betting there's a market for video search.

  --  Search: Cuil ($33 million) and SearchMe ($43.6 million) might imagine
      themselves Google killers, or at least viable alternatives. For
      investors, imagination makes for a crummy investment strategy.

  --  Self-publishing/social-publishing: Uber.com and Bricabox litter this
      landscape, having shuttered themselves as things got rocky. It's
      unclear whether ShareNow.com can thrive here.

"These startups are gambling that they'll be acquired by the dominant players in each of these Web 2.0 sectors - Google, Facebook, YouTube, MSN, and Yahoo," says Terry Sweeney, Editor in Chief of Internet Evolution. "As if today's market wasn't enough of a hindrance, many of these startups also suffer from fuzzy business plans, poor execution, and even crummy company names. Incredibly, that's not stopping the flow of investment in some below-average companies."

About Internet Evolution

Internet Evolution hosts more than 100 world-famous Internet experts - such as Kevin Mitnick, once the most-wanted computer hacker in the world; Dr. Lawrence Roberts, inventor of packet switching, and one of the world's foremost authorities on telecom network architectures; Vint Cerf, Vice President and Chief Internet Evangelist for Google; Craig Newmark, the founder of Craigslist.com; Paul Mockapetris, inventor of the Domain Name System (DNS); Howard Schmidt, former White House cybersecurity adviser; and Andrew Keen, author of Cult of the Amateur: How the Internet is killing our culture -- all of whom are addressing today's critical socio-economic issues within its ThinkerNet blogosphere. Internet Evolution also offers broadcast-quality broadband video documentaries and interviews; investigative reports; and user-generated content facilitated via the latest Web 2.0 technology.

About TechWeb

TechWeb (http://techweb.com/aboutus), the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events, Interop, Web 2.0, Black Hat, and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise, InformationWeek.com, bMighty.com, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, and Wall Street & Technology magazines. TechWeb also provides end-to-end services including next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than $2.5 billion.

*13.3 million business decision-makers: based on number of monthly connections

About United Business Media Limited (www.unitedbusinessmedia.com)

United Business Media Limited (UBM) is a global media and marketing services company that informs markets and brings the world's buyers and sellers together at events, online, in print, and with the information they need to do business successfully. UBM serves professional and commercial communities, from IT professionals to doctors, from journalists to jewelry dealers, from farmers to pharmacists around the world. UBM employs more than 6,500 people in more than 30 countries. UBM's businesses operating in the US include CMPMedica, Commonwealth Business Media, Everything Channel, PR Newswire, RISI, TechInsights, TechWeb and Think Services. UBM is listed on the London Stock Exchange (UBM.L) and has a market capitalization of $2.5 billion.

  Contact
  Amy Averbook
  TechWeb's Internet Evolution
  (212) 925-0020 x112