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When a renowned investor suggests that Google, one of Silicon Valley's biggest home runs and the biggest hit on the Internet, is passé, it sort of pricks up your ears.
Roger McNamee, the founder of Elevation Partners, said just that this week: "With all respect to Google, it is Web 1.0."
McNamee's seemingly derogatory observation about Google (GOOG, news, msgs) -- the greatest search engine in the universe, the god of the Web, the organizer of our cluttered online lives -- was one of many provocative lines to come out of a panel discussion hosted March 27 by the Churchill Club in San Jose, Calif.
The panel pulled together a group of high-profile venture-capital investors, including John Doerr, a partner at Kleiner Perkins Caufield & Byers, who sits on the boards of Google and Amazon.com (AMZN, news, msgs); Tony Perkins, the founder of AlwaysOn; Joe Schoendorf, a partner at Accel Partners; and Steve Jurvetson, the managing director of Draper Fisher Jurvetson.
Jurvetson's thoughts on synthetic life forms and Moore's Law, the panelists' unanimous vote for Apple's (AAPL, news, msgs) yet-to-released iPhone as some kind of savior for the mobile Internet and McNamee's thoughts on Google were part of an hour-long discussion about the top 10 trends over the next 12 months.
McNamee's remark about Google came amid consideration of investment opportunities in "Web 2.0," the catchphrase for Web sites and services that allow audiences to interact, collaborate and become the authors, producers and stars of their own media productions.
True to the nature of interactive applications, as the celebrated venture capitalists gave their opinions, the 800 attendees voted on whether they thought the predictions would come true by holding up green (for agree) or red (for disagree) placards.
Much of the discussion focused on which companies appear to be doing a better job evolving or innovating as the Web allows for more engagement and collaboration.
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Irrational exuberance about to break out?
The topic of Google came up after Perkins predicted there would be a Web 2.0 shakeout in the next 12 months, pointing to YouTube's $1.65 billion sale to Google last year as a potential sign of irrational exuberance about to break out.If spending is any measure of irrationality, he has a point. About $844.4 million was invested in 167 Web 2.0 deals around the world last year, more than twice as much money and nearly twice as many deals as in 2005, according to Dow Jones VentureOne and Ernst & Young. The United States dominated Web 2.0 investing last year, accounting for $682 million and 126 deals.
The audience seemed to unanimously agree with Perkins, as I noticed a sea of green placards rise above the dinner tables.
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The panelists, not surprisingly, disagreed with Perkins. They, after all, have a vested interest in this opportunity. "There's too much money devoted to this sector," said Doerr, of the Amazon and Google boards. "To have this sector decline, we'd have to run out of money."
Indeed, U.S. venture capitalists raised roughly $50 billion in the past two years, according to Dow Jones VentureOne. That's a jump from $41 billion raised in the previous three years.
Schoendorf, whose firm Accel invested in Facebook, Metacafe and Brightcove, is obviously betting big on Web 2.0 and video.
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