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“We are going to lose some good companies.” That’s the warning cry from investors in tech these days.

Some we won’t miss, of course: the lame, me-too, or single-featured “products” masquerading as businesses. But be prepared. Some Web 2.0 start-ups that are well-loved by many are in serious danger of falling off the cliff.

The problem is that being loved is no guarantee for success. Even being used isn’t enough. Remember Kozmo, the munchie messenger service from the last bubble? Not a person who used it didn’t love it. In the interest of building a user base, the company was OK with losing money on every transaction in its early days. But when the time came for it to become a real business, it was too late. It couldn’t transition to a viable company, and it folded. It was a tragedy.

Here, in no particular order, are 11 online services companies that could face a similar fate. Several of them are 2008 Webware 100 winners. Like I said, popularity isn’t enough.

Twitter

Although well-used by many and even relied upon by some (like me), Twitter has yet to turn on a revenue model. It’s not like the company would lose users, if it set up a minor advertising strategy as a test; people want to see the company make some money. Please, Twitter, turn on the revenue before it’s too late.

Meebo

This is one of the coolest online communication companies I’ve seen. I like its products and services. But the revenues for running branded chat rooms cannot be all that large. Meebo belongs under the wing of a larger company like Facebook or Microsoft, but with Meebo’s expensive valuation and the coming cutback in M&A, I fear that its exits may be blocked.

TripIt

A very useful service for organizing travel information. Wait, travel? Who’s going to be traveling more often during the economic storm we’re heading into? People are going to sit at home on their mattresses filled with cash, teleconference instead of go on business trips, and take vacations in their backyards. I fear for this company and other clever travel start-ups.

Zillow

The real-estate site’s revenue model is advertising. Real estate and bank advertising. Unless the real-estate research site starts charging for foreclosure listings, I don’t see it doing too well in a hunkered-down economy, in which people are trying to hold on to their homes for dear life, not upgrade.

Pandora

People love this product. It helps them find music they like. What’s wrong with that? Here’s what: unfavorable royalty rates could make it too expensive to run. Survival depends on ongoing negotiations with the music industrial complex. They appear to be going well, but the company is very exposed.

Second Life

The Web interface and social network of the future. Except that it’s expensive to run, hard to use, and suffers from empty-restaurant syndrome.

Skype

The revolutionary VoIP service was acquired by eBay, which someday may be seen as its downfall. A noncore service to the auction site, eBay may well want to spin off Skype to maintain focus. But who would buy it at the valuation that would make eBay stockholders comfortable?

Ask

Why isn’t it dead yet? It’s really a good search engine, and even a small piece of the search economy can generate significant revenues. But running fourth place in a three-horse race is not a good position to be in when the costs of competing are high, as they are in the search market.

DailyMotion

This popular mostly European video-sharing site isn’t under the protection of a major moneymaker like YouTube is, and it hasn’t yet found a way to offset its streaming costs with advertising revenue.

Netvibes

Here’s another product I have used and still like a great deal (occasional frustrating slowdowns notwithstanding), but that has a limited upside as a standalone business.

Netvibes’ much smaller competitor, Pageflakes, was acquired earlier this year, and that’s what needs to happen with Netvibes. But media companies–the natural acquirers for Netvibes–are about to get hammered by a retrenching advertising market, and that may spell the end of Netvibes’ survival plan. (The upcoming release of a Facebook product might help growth, but I don’t think that’s the real issue Netvibes is facing.)

MySpace

Walking dead. Although it’s under the aegis of Rupert Murdoch, the notoriously ruthless businessman could easily cut loose this social network of yesterday. The momentum is certainly not with this one.

See also: The tech downturn: How long and how bad?

More here:
Today’s Kozmos?: 11 potentially doomed dot-coms

“We are going to lose some good companies.” That’s the warning cry from investors in tech these days.

Some we won’t miss, of course: the lame, me-too, or single-featured “products” masquerading as businesses. But be prepared. Some Web 2.0 start-ups that are well-loved by many are in serious danger of falling off the cliff.

The problem is that being loved is no guarantee for success. Even being used isn’t enough. Remember Kozmo, the munchie messenger service from the last bubble? Not a person who used it didn’t love it. In the interest of building a user base, the company was OK with losing money on every transaction in its early days. But when the time came for it to become a real business, it was too late. It couldn’t transition to a viable company, and it folded. It was a tragedy.

Here, in no particular order, are 11 online services companies that could face a similar fate. Several of them are 2008 Webware 100 winners. Like I said, popularity isn’t enough.

Twitter

Although well-used by many and even relied upon by some (like me), Twitter has yet to turn on a revenue model. It’s not like the company would lose users, if it set up a minor advertising strategy as a test; people want to see the company make some money. Please, Twitter, turn on the revenue before it’s too late.

Meebo

This is one of the coolest online communication companies I’ve seen. I like its products and services. But the revenues for running branded chat rooms cannot be all that large. Meebo belongs under the wing of a larger company like Facebook or Microsoft, but with Meebo’s expensive valuation and the coming cutback in M&A, I fear that its exits may be blocked.

TripIt

A very useful service for organizing travel information. Wait, travel? Who’s going to be traveling more often during the economic storm we’re heading into? People are going to sit at home on their mattresses filled with cash, teleconference instead of go on business trips, and take vacations in their backyards. I fear for this company and other clever travel start-ups.

Zillow

The real-estate site’s revenue model is advertising. Real estate and bank advertising. Unless the real-estate research site starts charging for foreclosure listings, I don’t see it doing too well in a hunkered-down economy, in which people are trying to hold on to their homes for dear life, not upgrade.

Pandora

People love this product. It helps them find music they like. What’s wrong with that? Here’s what: unfavorable royalty rates could make it too expensive to run. Survival depends on ongoing negotiations with the music industrial complex. They appear to be going well, but the company is very exposed.

Second Life

The Web interface and social network of the future. Except that it’s expensive to run, hard to use, and suffers from empty-restaurant syndrome.

Skype

The revolutionary VoIP service was acquired by eBay, which someday may be seen as its downfall. A noncore service to the auction site, eBay may well want to spin off Skype to maintain focus. But who would buy it at the valuation that would make eBay stockholders comfortable?

Ask

Why isn’t it dead yet? It’s really a good search engine, and even a small piece of the search economy can generate significant revenues. But running fourth place in a three-horse race is not a good position to be in when the costs of competing are high, as they are in the search market.

DailyMotion

This popular mostly European video-sharing site isn’t under the protection of a major moneymaker like YouTube is, and it hasn’t yet found a way to offset its streaming costs with advertising revenue.

Netvibes

Here’s another product I have used and still like a great deal (occasional frustrating slowdowns notwithstanding), but that has a limited upside as a standalone business.

Netvibes’ much smaller competitor, Pageflakes, was acquired earlier this year, and that’s what needs to happen with Netvibes. But media companies–the natural acquirers for Netvibes–are about to get hammered by a retrenching advertising market, and that may spell the end of Netvibes’ survival plan. (The upcoming release of a Facebook product might help growth, but I don’t think that’s the real issue Netvibes is facing.)

MySpace

Walking dead. Although it’s under the aegis of Rupert Murdoch, the notoriously ruthless businessman could easily cut loose this social network of yesterday. The momentum is certainly not with this one.

See also: The tech downturn: How long and how bad?

Source:
11 troubled Web companies: The next Kozmos?

Google's Lively is a Web-based project similar to Second Life. This shows a re-creation of Google headquarters, complete with the T. Rex skeleton.

Google on Tuesday plans to unveil an online 3D social arena called Lively, the Internet giant’s take on Second Life. But Google wants it to be part of your first life.

Second Life requires users to download and install a separate “client” software package that taps into the online world. Lively also requires a download and installation–Windows only for now–but then people can use Internet Explorer or Firefox to enter the virtual world.

“It’s integrated with the Internet. It’s not an alternate destination,” said Niniane Wang, Google’s engineering manager for the project. “Our intention is to add to your existing life.”

Integration with the ordinary Internet takes several forms. For one thing, you can pipe in content hosted elsewhere on the Internet, including photos or videos. For another, you can embed your Lively area into your blog or, using widgets Google has written, on MySpace and Facebook Web pages. And you can e-mail your friends a normal Web address to get them to join.

With Lively, you can set up you own online spaces–rooms, grassy meadows, desert islands, or, in the demo version I tried, simulated Silicon Valley office parks. You can change the clothing or form of your avatar (that’s your online incarnation, for those of you who missed the Second Life hype). And of course you can chat, do backflips, shake hands, and give high-fives.

The idea is to bring a better social dimension to online interaction, Wang said–something more sophisticated for expressing oneself than an emoticon on an instant-messenger status line.

“We think there is a desire to socialize in this way,” Wang said, suggesting that’s why Second Life got so much attention when it blossomed in popularity a couple years ago. “We hope this product will help them do that.”

Integration with the Internet is indeed a significant departure from the Internet, but much of the Lively sales pitch will sound–how to put this politely–familiar to those who’ve already read virtual worlds press releases from years past.

I had a number of burps and hiccups using Lively in my demo on a somewhat elderly but by no means ancient laptop, problems Wang said weren’t widespread. When it’s working correctly, it took a little while to master the controls for moving the perspective and my avatar around.

After that, the novelty wore off even more rapidly than with Second Life. I’m sure it would have been more exciting with somebody else to talk to than a mock-up of Google’s T. Rex skeleton, and perhaps if it were a room that I designed myself.

Don’t get me wrong. I remain a believer, overall, in this form of online interaction, however socially stunted it may feel compared with, say, a singles bar. I just think the technology has a ways to go. I found Second Life more immersive, but even so, even the relatively crude communications enabled by e-mail and instant messaging did more to revolutionize my online social interactions.

A few other differences from Second Life: Lively doesn’t have money. It’s designed to be easier to use, with a drag-and-drop interface. And it’s not programmable, at least yet, so you can only select furniture, clothes, hairstyles, and such from the prefabricated catalog Google supplies.

Money and programmability are both items the company is seriously considering, though, Yang said. A Mac OS X client also is a high priority, she added.

Originally posted here:
With Lively, Google tries its own ‘Second Life’