Friday, August 22, 2008

Bubble woes overtake the widget industry

Getting venture capital for a new widget idea isn't as easy as it was a year ago, according to a recent CNET article. The problem? Growing widget fatigue among investors that has come about because of an intensely overcrowded marketplace.

Bill Tai, a venture capitalist at Charles River Ventures, told CNET that reality is now setting in for the widget market, which is going to have to come to grips with the fact that many ideas simply aren't viable.

While tough times and a packed marketplace won't mean an end for widgets, both make attracting advertisers -- the business model for nearly all widget makers -- that much harder.
But interactive marketers aren't ready to give up on widgets by any stretch. In a recent article, Michael Raisanen made the point that the marketing business is still buzzing about widgets, but the demand for quality has now overtaken the initial interest.

That may not be a bad thing for the bigger companies like Slide, Free Online Dating and RockYou, but it could mean an uncertain future for smaller widget shops like mini blogs or other ones that either lack good products or the ability to educate advertisers on why their portable applications are strong carriers for branded messages.

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