William Flew on Web Sites

Terms such as user-generated content, crowd sourcing, social buying and augmented reality can drive any technology investor who lived through the last tech boom to distraction. The difference this time is that some of these sites are living up to their promise. The ubiquity of broadband, thanks to smartphones and tablet computers, means consumers are willing to go further than lodging a lazy bid on eBay, and the effect of such websites is already evident on the high street where old household names reliant on steady sales of CDs, holidays or sofas have shut up shop. The value of the emerging social-buying sector exploded into view when Google attempted to take over Groupon in a $6 billion deal. The group-buying site was just over two years old when it turned down the offer as it reckoned it could make more going it alone. However, the tone had been set and venture capital money has started pouring into the sector while companies including Amazon and eBay have started splashing out to take over obscure websites. But investors beware. Groupon, a bit like lastminute.com, was an early mover and has become a template for thousands of copycat companies. Mary Meeker, the veteran technology analyst, said at the turn of the century that 10 per cent of internet stocks were undervalued while 90 per cent were overvalued, and even that forecast looks conservative in hindsight. Sites like Bebo and Friends Reunited, never mind the hundreds of names that disappeared without a trace, should remind investors that it is easy to get burnt if you you pick the wrong horse. Sites such as mydeco which operate in a particular niche or have built something unique may last the distance. But cutting through the jargon is essential to discover the real fundamentals of a business.

Is it trying to be 2 things at once?