Web 2.0 : Lack Of Fundamental Innovation & Entry Barrier

Randy Komisar, partner at KPCB has an interesting take on investing (or avoiding) Web 2.0 companies:
VB: Are you investing in Web 2.0?
Komisar: I’m personally not doing much in Web 2.0 at the moment. I’m looking for more fundamental innovations. I’m less interested in the content and media fallout. There are no strong barriers to entry in Web 2.0. If by Web 2.0, you mean companies that build an audience to be monetized by Google, I am not actively pursuing them; though I should never say never. He adds,

I’m not sure how long YouTube would have remained an independent business had they not been bought by Google. Google has an efficient search engine to monetize large audiences. If you’re creating Web 2.0 products and media, its tough to build anything of sufficient scale to remain independent — you are more likely to end up being a feature on Google, Microsoft or Yahoo. Google bought YouTube because they’re interested in where people are spending time online, and because they didn’t want anyone else to buy it. Google has the capacity to suck the air out of the room – they’re making sure that Microsoft and Yahoo don’t get a toehold on AOL or MySpace or YouTube. Its too early to guess how all this plays out.

Interesting indeed. As I wrote almost several months back, Web 2.0 is overdue for a reality check. As I wrote here, I am not so unduly optimistic about the Web 2.0 movement – I had been calling for a reality check for some time. But the enthusiasm shown in building this movement is indeed amazing and some of applications show promise of success. I do know that this web 2.0 is managing to attract a new bunch of entrepreneurs who are generally well regarded for their capabilities and enterprise. Sure the list in the Web 2.0 hall of shame will be longer than the Web 2.0 hall of fame, but still the movement needs some positive consideration.