Social Networks Continue To Excite The Venture Capitalist Crowd

Posted by Paul Glazowski on July 23rd, 2007

Tired of all the social networking news circulating the blogosphere? You’re not alone. There are lots of folks who can’t take the headlines about Facebook, MySpace and all the rest.

But the venture capitalist crowd feels the complete opposite.

Yes, they’re still very bullish, apparently. Very recently word filtered around that Hi5, a very popular and quickly expanding network due to increasing interest outside the US (Alexa now ranks the network as the 11th most popular site on the Internet) has been the recipient of a $20 million infusion courtesy of Mohr Davidow Ventures. And Tagged, another booming establishment mostly unknown to US-based networkers which has been profitable almost from the get-go, has secured $15 million in new investment cash. TechCrunch claims that the site is adding more new users per day than MySpace – 350,000, according to statistics garnered for the month of May.

Mind you, these are but a very minor portion of investments made between April and June of this year to further fuel building on the Web. Both Dow Jones and Ernst & Young peg total funding for Q2 2007 at just shy of $1bn. $1bn in the space of three months. Insanity!

Yeah, we definitely have another bubble on our hands. Let’s hope that this one’s doubly thick and double strong. Or not. If you’re looking for a bust this time around as well, start praying for widespread irrationality. I have to say, by the looks of things the future could go either way (stable or unstable). I kinda want to see things work out, though. The Web’s a whole lot more fun these days now that we’ve got some pretty speedy broadband to actually enjoy it. It’d be unfortunately to see the tech sector head downward just when we’re starting to see some really phenomenal stuff – what with Web apps and such. Ah well, what will be will be.

I don’t really know what to make of these new developments, other than to say that I definitely foresee an increase in funding for more international creations. Whether that means less cash given to developers stateside (I personally think they could do with a cooling off period) or simply more money invested overall, I can’t say. But there have lately been strong hints that quality stuff being made outside the US may get more notice in the months and years ahead.

Comments

No comments.

Post a comment