All Things Digital

As the economy continues its very drastic downward slide–part of a binge and purge cycle that is almost classic in its psychology–it is, of course, no surprise to see Web 2.0 finally wise up.

While the quarter-dropping-in-the-slot was a bit slow, I think no one now doubts the impact of the tech and Internet business, going forward, from large companies to small start-ups, and all the rest of the ecosystem that relies on the virtuous circle of digital life.

Much has been made here and all over the blogosphere about various prescriptions to hunker down by venture capitalists and plans by companies to cut costs in this downturn.

That includes the realization that, as one Web exec wrote me yesterday, “no more eyeballs=business.”

Of course, this change in tone is a good thing and much needed, given how frothy things had become in Silicon Valley over the last two years.

While the excess was by no means anything like the last bubble–where inane start-ups actually had the audacity to IPO and, thereby, essentially take cynical and sometimes criminal advantage of an ignorant investing public–the maxim of Web 2.0 that basics like revenues or positive cash flow do not matter compared to growth has been a dangerous one.

And though growth is key too, part of an investment and belief in the future of important trends like social networking and the ubiquity of online advertising, the go-go strategy had taken too much of the attention of entrepreneurs.

And while the crash is certainly not due to that focus, and tech is indeed getting unfairly hurt, given how healthy much of the sector is, Silicon Valley needed an attitude adjustment.

In other words, while the recent excess is not the culprit, its departure is a very good thing.

The problem is, that does not matter at all, given the situation and where it is headed.

And where is that?

Onward, of course, although maybe not upward for a while.

In what is a typical shift in the zeitgeist this past week, TechCrunch’s Michael Arrington penned an interesting rumination today about what he calls the “ignoble but much needed end to Web 2.0.”

Like me, he references the dopey lip-synching video made by a bunch of Web 2.0 folks while on a vacation, which will surely become a classic example of how profoundly out-of-touch and egregiously silly their mindset has become.

Arrington writes:

“Goodbye, Web 2.0. I hope I never have to type those words again. Now can we please get back to work? There’s still a ton left to do before we get to Matrix-style virtual reality, the Singularity, and mobile phones with batteries that last a whole day.”

Although it might feel like it, I think calling it an “end” is probably too dramatic for what is happening now.

But I would have to agree wholeheartedly that moving on to what really matters is perhaps the silver lining in this decidedly difficult time.