Tuesday, March 18, 2008

Web 2.0 Investments May Be Peaking

Dow Jones VentureSource reports that Web 2.0 investment rose in 2007, but speculates that the investment levels in the industry may be peaking, particularly in the San Francisco Bay Area. Dow Jones said that according to the firm, $1.34B was invested in 178 Web 2.0 deals in the U.S. in 2007. The amount of investments were up 88% from 2006; however, most of that growth was driven by the $300M investment in online social networking site Facebook. Dow Jones said that Web 2.0 deals in the Bay Area totaled $720M in 72 deals, up from $431M in 74 deals last year. However, removing Facebook--which represented 22% of all funding in Web 2.0 companies in 2007--Jessica Canning, Director of Global Research for Dow Jones VentureSource, said that "deals in the Bay Area actually dropped from 74 deals in 2006 to 69 last year and investments were down 3% from the $431 million invested in 2006."