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February 22, 2006
Wrestlemania and Web 2.0
We’ve been wrestling with some of the Web 2.0 corporate communiqués, trying to figure out which new launch is in fact a real business. After reading a whitepaper on the topic, published by a trans-Atlantic corporate finance boutique, we now know why it is so challenging.
An investment banking firm says that Web 2.0 is not unlike latenight wrestling: part hype, part marketing jargon, and part reality.
"We view Web 2.0 as part hype, part marketing jargon, and part reality, not unlike latenight wrestling." writes Arma Partners in a research paper it published on the latest crop of online ventures.
It is an intriguing analogy. If Web 2.0 is like latenight wrestling, then it is totally bogus because as far as we know those wrestling “matches” are pure fiction. Ok, the firm didn't say "exactly like", it said "not unlike" but let's try out the analogy.
There are basically three types of participant in the pro-wrestling game: the organizers (such as WWE World Wrestling Entertainment Inc), the flamboyant stars or wrestlers (The Rock, Hollywood Hulk Hogan, Candice), and the fans.
The only thing real about pro-wrestling is the money that the organizers make. Just check out WWE in the Hoovers company database. So are the investment banks like the WWE in this scenario? They can make real money in fees by brokering the M&A of Web 2.0 companies, taking a small slice of the $5B spent last year alone on acquisitions by Google, Yahoo, News Corp and the like.
The “pro wrestlers”, the outspoken stars of the events, would be the entrepreneurs, we guess. The venture capitalists backing them are like the wrestlers’ promoters. This group also make some money based on their entertainment value and their ability to create a strong community of fans.
But which group is the analog to the wrestling fan? We take it that role is the one that is left for the Internet giants and the wannabe Internet giants, such as traditional media companies and telcos, the ones touting the triple and quadruple-play service strategy.
Are the acquirers like a wrestling fan, not one that merely buys a ticket, but one that actually makes a bet on the outcome of a RoyalRumble or a Smackdown tournament?
Not likely. We stretched the analogy too far. Besides investment banks surely do not see strategic buyers as foolish gamblers. But it was an interesting little exercise.
And it has given the alarm:clock a new idea. We are now looking into how we can reprogram our Movable Type templates in order to bring you pay-per-view RoyalRumble-like title matches. Anyone up for a smackdown battle between Google Video and YouTube or Yakalike versus Peekko?
Stay tuned.
Read - “Web 2.0 – Hype or Reality?” (Arma Partners)
Read - Company profile of World Wrestling Entertainment, Inc (Hoovers)
Posted on February 22, 2006 06:20 AM | Posted to Venture Capital | Permalink
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