Where is the Pets.com of Web 2.0?

The question, “Are we in another bubble?” continues to circulate around the blogosphere. Recent answers are mostly flavors of no (for example, Scoble, Battelle, Malik). So let’s ask the question, what would qualify as a yes?

Measured by the NASDAQ, the first Web bubble really got frothy in 1999 and peaked in early 2000. Around then, a common model for consumer-focused Web start-ups went like this:

1. Raise tens of millions in venture capital.
2. Pick something that sounds good with an “e” in front of it or a “.com” after it.
3. Hand a big chunk of your venture-capital money to Yahoo, AOL, and a few other portals in exchange for traffic; optionally, do a Super Bowl ad or similar big-media spend.
4. Do an IPO based on your “momentum” from (3).

The bubble part of this arrangement was that the public markets bought it, rewarding now-infamous players with IPOs. With its sock-puppet mascot, Pets.com is perhaps the most memorable example. There were many others.

Fast forward to today. Where is the Pets.com of Web 2.0? I’m not talking about fallen stars; it’s too early for that. I’m asking whether any Web 2.0 company looks like one of the big dot-bombs in bubble mode.

When we see fledgling companies bank wads of venture capital so it can be spent primarily on marketing programs, and when the economics of those marketing programs don’t matter, and when the financial markets hand-out the rewards anyway, then we’ll know to ring the “Bubble 2.0” bell.

Of course, we can argue about other qualifications for a new bubble, but let’s just remember how high the bar was set by Bubble 1.0.

[See also the Bubble Calibration Instrument.]