2005 was a very positive year filled with growth, acquisitions and false dreams. In 2006 I think you will begin to see the fall of many business categories built upon models that aren’t sustainable for long-term growth. I will try my best to play Nostradamus as I look at a few online categories that are doomed to fail in my opinion.
Ironic that I start off with this one, eh? Barry Bell is going in the right direction when he asks where’s the value in blog networks? 9rules many times is referred to as a blog ring because we “simply get a ton of sites and just put a logo on them”, but the irony is the “real” blog networks exhibit more of the qualities of a web ring than 9rules does.
As is the case with the rest of the categories I touch upon in this entry, you have to provide some type of value to the end user and many blog networks just don’t do that. Many of them don’t even provide any value to their writers, but since they are so easy to startup and a ton of people are getting caught up in the “pro-blogging” wave they will continue to grow in numbers for a little bit longer before declining rapidly.
SearchFox is the first victim this year, closing its doors on January 25th and I can only imagine that more will follow. It just seems to be the kind of space where the expenses outweigh the revenues (the tipping point is never reached). There is definitely room for something innovative in this space, but for once this sector needs to step into the mainstream I think to truly be successful.
You will see a lot more Diggs this year because they are easy to implement and setup and the rewards outweight the risks. However, with so many coming on to the scene, which one becomes the de facto standard? Digg is not without its problems, but it already has a choke hold on this sector and if Kevin Rose ever decides to expand its topics it can truly be a force amongst mainstream web users.
I don’t think however that Digg threatens real news sites such as Newsvine since Newsvine only reports real news (as far as I can tell) or Slashdot, which has a stronger community. Digg reminds me more of Fark with its quick links and short blurbs. Its success comes because of its quick hit addiction. You always comeback looking for that cool new link (the quick link), but usually just leave unsatisfied.
So those are my three categories that I think will definitely see a major dropoff this year. Probably not in the first half as momentum is still going, but shortly thereafter and honestly I couldn’t be happier. Monday I will go into why I think many of these sites and companies don’t make it big like they imagined they would and what type of companies are the ones that get bought up by Yahoo, Google, et al.