I strongly disagree with Greg Linden’s prediction for 2008:

We will see a dot-com crash in 2008. It will be more prolonged and deeper than the crash of 2000.

The crash will be driven by a recession and prolonged slow growth in the US. Global investment capital will flee to quality, ending the speculative dumping of cash on Web 2.0 startups.

Bubble 2.0 will burst, and I agree that US economy and recession risks are huge factors.  But I don’t think it will be comparable to the crash of 2000.

The big factor:  the fundamentals are much different this time around.   Since 2000, customer behavior has evolved significantly (when was the last time you placed an order through an 800 number?).  Broadband adoption passed the half-way mark in the US, and video use has taken off.  AJAX and Flash technologies enable highly interactive user experiences.    Time in front of the television is shifting to time on the Internet.  Off-line advertisting dollars are shifting on-line, because that’s where the users are.

The other factor:  much more of the action this time around is happening outside of traditional venture capital (who’s over-investment behavior drove the first bubble).  As the capital needed to develop a Web idea drops, more entrepreneurs are bootstrapping, raising small amounts from friends, or using their own capital.  Those entrepreneurs are not spending $10m of VC money on launch parties.

Bottom line:  the bubble will burst, but it’s not going to be as bad as 2000.