web 2.0

In the first three quarters of 2006, venture capital firms poured $455 million into Web 2.0 startups, according to Dow Jones VentureOne and Ernst & Young. Yet, not one Web 2.0 company went public last year, and only four were acquired, Dow Jones found. Other than Google’s $1.65-billion acquisition of YouTube, these were not high-profile exits. Meanwhile, several web companies are starting to show signs of failing.The much-ballyhooed San Francisco-based startup Browster, for example—backed a year ago by with $5.8 million in VC funding—is now widely believed to have closed its doors. Its phone is no longer taking messages, and its site is running only intermittently.Why the slowdown? This year will put many of these companies to the test, says one Silicon Valley VC. Only a few of the many Web 2.0 companies that launched in the past few years will be able to make it.This could explain cutbacks this month at such outfits as Palo Alto, California-based FilmLoop, which reportedly laid off most of its staff recently, and RawSugar, an Israeli/Silicon Valley search startup, which closed its offices in late December.