Web Boom 2.0

Dotcoms are hot again. But this bubble is different from the last one. Here's how

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4. FOOD. This time there's no such thing as a free lunch. "I'll know it's a bubble when I can eat for free," says my pal Om Malik. Malik's a blogger and BUSINESS 2.0 columnist who has been covering Web 2.0 since its inception. Back then, he said, he could go three months without buying dinner--San Francisco was one big movable feast, with a buffet of dotcom parties every night. Now he gets just two or three invites a week.

5. BURN RATE. Web 2.0 companies don't live large; they live small. Under the old model, start-ups took a ton of IPO money, then quickly burned through it by hiring too many people and supplying them with Foosball tables. Web 2.0 start-ups are monastic by comparison--and the smartest of them get you, the user, to do all the work. Malik's commercial venture, a tech blog called GigaOm, has only four paid employees and no office. Malik works out of his one-bedroom apartment. When he needs to see his customers, he meets them at the nearest Starbucks.

Last time, everyone knew we were living in a bubble, but few got out before it was too late. This time, writes Winer, it will be easy to tell when to head for the exits: "Google stock will crash. That's how we'll know." Which, according to the four-year rule, should happen any day now. •

Quittner, a former TIME editor, is the editor of BUSINESS 2.0

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