Thursday, August 9, 2007

The Bubble is Getting Bigger

PaidContent just reported that NBC and News Corp's Clown Co, as dubbed by Google execs, video sharing site, received a $1 billion dollar valuation by receiving $100 million for 10 per cent. Earlier NBC Uni launched a site where users can watch commercials (similar to TBS's VeryFunnyAds). This follows large VC investments in comedy video sharing sites, $30 million in Video Jug, and a boat load more in Veoh (which MTV exec Tom Freston joined in...hmmmm this could be interesting..).

Well, I hate to say it guys but this is the same exact scenario that happened in 1999 with ecommerce websites (although no lavish parties this time around). Sure, we all want to build the next YouTube but with no business model how can these valuations be sustained and which companies can absorb the loss (and potential lawsuits) of these resource intensive sites? Only a handful and Google is trying to make good on its first purchase.

We need to see a model that works in this space. There needs to be a way for producers to make money for advertisers to make money and for the user to...well the user always wins.

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