Tuesday, March 18, 2008

Web 2.0 Investments Jump, But May Be Peaking

Dow Jones VentureSource is reporting today that the Web 2.0 investment boom may be peaking. According to the firm, there has been a record $1.34B invested in 178 Web 2.0 deals in the U.S. in 2007, up 88% from 2006. However, Dow Jones found that the results were significantly bolstered by the $300M investment in online social networking site Facebook, which represented 22% of all funding into Web 2.0 companies in 2007. Among other data released by Dow Jones was a slowdown in deal growth, with a 25% increase in the number of deals between 2006 and 2007; compared with the growth shown between 2002 and 2006, when the investments in the sector doubled every year. Regionally, Dow Jones counted 14 deals and $115M in investments in Southern California for 2007, up from 10 deals and $41M in investments in the area in 2006.