In 2000 it was the dot-com crash. Right now it’s the death of Web 2.0.

According to Michael Arrington, writing in TechCrunch, the recent crisis on financial markets has ended not just easy credit, but more importantly for many startups, easy capital.

Just as occurred following the dot-com crash, it seems that venture capital firms will have less capital to invest in startups, be much more choosy about which companies they do invest in, and will be more actively involved in how the capital they have invested in startups is used.

With less money available, Michael Arrington predicts startups will start laying off people, with the ‘bulging marketing and communications departments’ the first to go.

Apparently that’s not such a bad thing since these are not only ‘the very people who make Silicon Valley such a nasty place to be in the boom times’, but as ‘the number of startups dwindle, it won’t be so hard for them to get attention from press and users, so those marketing and PR flaks won’t be missed all that much.’

Of course, it’s my view that tough times call for more marketing and selling - and less techie perfectionism – so I’m not sure that slashing and burning in the marketing department is the best idea.

Then again, we’re talking about people who equate ‘marketing’ with fluffy, irrelevant, non-direct response advertising and PR. Hardly real marketing, is it?

Meanwhile, this quote from Michael Arrington is priceless:

“We’ll look back in later years and think of this most recent boom as the Web 2.0 period, when we were wowed by the magic of user generated content, copyright violations on a massive scale, and neat little widgety things that used Javascript and Flash to turn web pages into pretty close equivalents to the old desktop apps. Of course there were other evolutions as well. Advertising technology has advanced steadily, particularly in tailoring ads to an individuals needs, and tracking them properly. This is the period that social networking as we think of it today was born, and we’ll never be rid of it in our lifetimes.”

Dot-com. Web 2.0. Boom. Bust. At the end of the day, no business survives without… marketing.

Source: Michael Arrington, “An Ignoble But Much Needed End To Web 2.0, Marked By A Party In Cyprus”, TechCrunch, October 10, 2008