Lots of discussion lately about a new “web 2.0 bubble“.
While most of us fully understand both the theory underlying investment bubbles and the potential for wealth-destruction, human behavior is such, it seems, that we often can’t avoid getting into bad situations. Of course, it’s hard to recognize a bubble until it’s too late–after all, perhaps it’s just a strong bull market!
Unfortunately, I think the speculation is justified: I can confidently confirm that there is a new bubble forming. As is often the case, it involves a creative entrepreneur who essentially invented a new category–making a bundle in the process–and then hoards of me-too followers.
I’m talking about the Pixel Wars.
Here’s the backdrop: on August 26, Alex Tew, a 21-year-old student, decided he needed some cash for college. As Jeremy Levine (I first learned about Alex on Jeremy’s blog) describes:
Imagine I told you that a college-bound kid put up a web page with a giant grid on it. Let’s say he offered to sell squares on the grid — each 10 pixels x 10 pixels — for $1 per pixel (or $100 per square). How many could he sell?
If you’re like me, you’d probably guess zero. Or maybe a handful to some friends as a gimmick. Well, you’d be wrong. Very wrong.
As of today, Alex has sold $453,600 worth of pixels on his site, The Million Dollar Homepage. That’s real money!
Encouraged by Alex’s quick success, would-be millionaire copycats were bound to emerge–and they have. Some of the latest entrants:
- Million Dollar Home Page in Ukraine
- $500,000 Home Page
- The Million Quarter Web Page
- 5 Cent Pixels
- Million Cent Home Page (not to be confused with the Million Penny Page)
- Free Million Pixels
There are actually 77 competing sites offering $1 pixels, 4 sites offering 75 cent pixels, 21 sites offering 50 cent pixels, 13 sites offering 20 cent pixels, 24 sites offering 10 cent pixels, 10 sites offering 5 cent pixels, 22 sites offering 1 cent pixels, and 21 sites offering free pixels. There are also 38 sites selling pixels in Euros, 2 selling pixels in Yen, 7 sites selling pixels in Rubels, and 3 selling pixels in Zloty (the Polish currency).
In total, there are 385 pixel sites. I didn’t count them all myself. Instead, a couple of interested observers created yet another site–The Pixel Wars–to track all the emerging pixel sites on the net (the Pixel Wars guys aren’t selling pixels, but they do have a few Google ads). Maybe they should sell “picks and shovels” (infrastructure) to other would-be pixel sites.
While the original site–The Million Dollar Home Page–still has good sales momentum, most of the upstarts have sold few, if any, pixels. And, while there isn’t much to lose here, I think we can all see how this ends. Isn’t capitalism great?
OO
Left by Alex Barnett blog on October 21st, 2005