Amid the talk about Bubble 2.0 (count me as one of the the-sky-could-be-falling-chickens) is John Battelle's take on the lack of Web 2.0 failures. Fred Wilson makes some excellent points about low burn rates and reasonable VC behavior so far. That said, there will be failures and lots of them when all those once bright and shiny Web 2.0 start-ups can't raise another round after creating some cool services that failed to attract enough customers and/or advertisers. We've already seen a few start-ups go down while dozens of others will quietly close their doors with no media coverage, fanfare or TechCrunch notation. Perhaps one reason why failure this time around will have a lower profile than the dot-com boom is the lack of IPOs. This means fewer investors are involved and companies have much less notoriety. So when they disappear or go bankrupt, it's less of a public event. While everyone's still bullish about Web 2.0, don't be too surprised to see more wreckage wash up on the shore soon as the weaker ships fail to survive the competitive, business and financial elements. Web 2.0 may be a perfect environment for entrepreneurs to create start-ups but failure is just part of the eco-system.
Update: According to eBay, Kiko was sold for $258,100. GigaOm has some of the details, including the fact Kiko raised $50,000 from angel investors through convertible debt. It will be interesting to see who ended up winning the auction.
Update II: Jeff Jarvis steps into the fray with a summary of troubling thoughts about Web 2.0 throughout the blogosphere.