Dave Winer on Web 2.0:

Now, will there be a bubble? Yes, of course, read the VC blogs, they're basically telling you they're running out of deals they're willing to fund. And who doesn't think the growth of Google is going to slow at some point? Don't we all know that web advertising is a scam? A friend who writes for a very big news site said the other day that he had never clicked on an advertising link. Even people whose salaries are paid by the advertising industry think it's a scam. And scam is just another word for bubble.

I agree that there's a bubble, but it doesn't seem to be as big (or as silly) as the initial one. The advertising thing is slightly different though, I think. Advertisers and content producers have been lying to each other about the efficacy of the eyeball (or eardrum) model of advertising since the golden age of radio. The issue has always been one of imperfect personalization - advertisers know that they are wasting money, but have not been able to figure out how to effectively narrow the audience down - to be able to deliver a message to the person who wants it.

That should be possible with the web, but it will require a lot more tracking of behavior than some people will like. Not to mention that - like supermarket affinity programs - the tracking will really only be used to go after the high end consumer. The advertisers really want to find the 20% of their intended audience who spend 80% of the money, and deliver a message that has real interest to them. That's no easy task.