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The blogosphere as an echo chamber

The economics of starting up have changed dramatically. Today, a plethora of Web services, open-source platforms, and open affiliate and advertising partners can lower the cost of creating a Web-centric business and leverage others' efforts to take that business to market.

These economics have spawned thousands of new companies around the globe, and turned up the volume in the innovation ecosystem to deafening levels. Keeping track and pace with these new companies is a full-time job, one taken on by dozens of bloggers who have set up shop to act as "early warning systems" for each new wave of so-called Web 2.0 companies.

You see, the economics of media have also changed, and dramatically. Now, anyone with a bit of time and minimal technical patience can opine endlessly about the technology market - or any other topic, for that matter.

Like many of you, I follow the technology blogs. Some of them are quite good. Others are link factories that crank up the noise but deliver little additive value. Never was this clearer than during the 48-hour Google/YouTube rumor-fest prior to the official announcement of the acquisition. One wonders how blogosphere rumor-mongering accelerated negotiations and drove the announcement timelines.

In the moments after the Wall Street Journal published its story on the rumored acquisition, hundreds of bloggers posted their own knock-off stories, most of them referencing the Journal, and nearly all linking to some other blogger that wrote more or less the same post: Google is buying YouTube for a boatload of money. It is a (good/bad) deal for (Google/YouTube).
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Echo-sphere

In effect, the tech blogosphere became so obviously an inter-referential echo chamber. If markets are conversations, as the Clue Train Manifesto suggests, the blogs that enable that conversation were adding very little to this particular conversation.

In that moment, I became sadly aware that the tech/Web 2.0 blogosphere has become an echo-sphere, inflating a bubble around itself, a bubble that most certainly cannot be sustained because, ultimately, the economics of time value can't support so many voices saying so much of the same thing.

Ultimately, though, this may be the best barometer of market correction. Unlike past market deflation, where print media setbacks trailed the fall of the companies that supported them, traffic metrics on popular blogs may precede any correction of expectation and the market consolidation that most folks believe lies in our near future.

A word to the wise, then - keep your eye on Alexa ratings. They may just be the best leading indicator of the Web 2.0 market direction.

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Chris Shipley is the executive producer of NetworkWorld's DEMO Conferences, Editor of DEMO Letter, and a technology industry analyst for nearly 20 years. She can be reached at chris@demo.com. Shipley, has covered the personal technology business since 1984, and is regarded as one of the top analysts covering the technology industry today.

Shipley has worked as a writer and editor for variety of technology consumer magazines, including PC Week, PC Magazine, PC/Computing, and InfoWorld, US Magazine, and Working Woman. She has written two books on communications and Internet technology, has won numerous awards for journalistic excellence, and was named the No. 1 newsletter editor by Marketing Computers for two years in a row. To subscribe to DEMOletter please visit: http://www.idgexecforums.com/demoletter/index.html.


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