There were a few weeks in 2012 where many pundits were claiming that the big Web 2.0 companies were doomed to failure. These pundits had a lot of information available at the time that did show some pretty poor performance from Web 2.0 companies that had gone public. GroupOn, Facebook, Zynga, LinkedIn, and many others had their fair share of trouble on Wall Street and in their profits.
There have been some mixed results since then. Facebook saw a terrible IPO followed by a lack of any improvements for months. The largest Web 2.0 platform has since implemented numerous changes in their business and advertising model that have increased revenues and impressed shareholders. Their future looks promising.
Some companies that came out of the Web 2.0 era have not fared so well. Currently, one of the companies which took advantage of the massive amounts of sharing and data that Web 2.0 helped usher in, Pandora, has been under a lot of trouble lately. In a story in Forbes, Eric Savitz tells us that Pandora will not meet its projected revenues or profits per share. Like Facebook, Pandora is struggling along around $8 per share – half of its original IPO in June of last year.
While this isn’t necessarily a sign that Pandora is going to go the way of many other Web 2.0 start ups that couldn’t quite make it, it is a reminder that not all Web 2.0 ventures have gone well. Those that have succeeded have survived the rocky start that any new movement would be expected to have as it transitioned into a more profit based model. Facebook is a prime example of this and its future is currently looking fairly good.
Pandora doesn’t have nearly the number of users that Facebook has, but it provides a user-based service in music streaming that many enjoy. It won’t likely fail, but it definitely needs to make some adjustments like Facebook has to succeed.