With Google’s stock now topping $400, a community centric with no current business model website like Digg.com getting a few million in venture capital, IM client piggy-backing services like Meebo getting “smothered with requests to make an investment”, Bloggers making millions, and in general… the whole “Web 2.0” revolution going on right now has led many to question where the web is heading. Did we learn from our lessons last time when the bubble burst, or is the Web 2.0 revolution going to see the same fate in 5 years? John Battelle ponders that very question in a recent op-ed article for the NY Times. His opinion? No bubble to be found.

“Most companies this time around are taking the path of acquisition, finding homes at large, stable and profitable companies like Yahoo, Google, News Corporation or Barry Diller’s InterActiveCorp. The era of the hot Net I.P.O. is over, and good riddance. … So sure, there are too many start-ups, and sure, some venture capitalists are trying to get in on as many as they can. In the meantime, far more companies are starting that just might change the world, or at least interesting parts of it, and thanks to the lessons of the past, we now have an ecosystem that may enable them to make a serious go of it.”

That second half of the quote goes nicely with my Nerd TV post a few months back, about geeks wanting to program because they want to “change the world.” In this new age of the internet, that can easily be done with a good idea. This current web revolution is customer & community centric, not business model centric. We are seeing sites like Digg.com just have a good idea, give people the stories they want, and give them the power to determine what is newsworthy, not editors.

With such a community centric idea comes accelerated growth because the best publicity is word of mouth, and with accelerated growth comes a business model as it is needed to support and expand the service. I’m sure Digg is losing money hand over fist right now as Google Ads cannot support servers and bandwidth at the rate Digg is consuming both. Kevin Rose (co-founder) has stated that since their VC money came, a business model is being developed and we will see it soon. I think all of us in the industry are following this one closely. If they can turn such a successful, simple idea with no business model into one that does, and implement it without breaking what makes Digg so popular, that is good news for all of us and it is time to break out of the mold with some new ideas.