Google's purchase of video sharing YouTube last October for $1.65 billion (€1.2 billion) was a landmark event for the industry in more ways than one.

Many saw it as evidence that Web 2.0, the trend for websites to offer more interactivity and community features that can be easily controlled by users, had come of age.

But given that YouTube had been in existence for less than a year, had a modest revenue stream from advertising, and was being sued by a number of large media companies for copyright infringement, other observers surmised that we were returning to the internet hype of the late 1990s.

In 1999 when the business.com web domain was sold for $7.5 million (€5.5 million) it was seen as a sure sign of irrational exuberance. Last month, despite reportedly only having pre-tax earnings of $15 million, business.com was purchased for a mind boggling $345 million (€254 million).

The bubble 2.0 theory was most succinctly expressed by veteran technology journalist John C Dvorak in a PC Magazine column last July.

"Every single person working in the media today, who experienced the dot-com bubble in 1999-2000, believes that we are going through the exact same process and can expect the exact same results - a bust," wrote Dvorak. "It's déjà vu all over again."

But Andrew Keen, author of the Web 2.0 bashing book the Cult of the Amateur (see above), points out there is a fundamental financial difference this time around.

"The fundamental difference between the first wave of the internet and second is that there is very little public money involved so it's hard to see it crashing like Black Friday in spring 2000," he says.

Keen says that while the dot com companies went public with minimal revenues and no business model other than an advertising deal with AOL, none of the Web 2.0 companies have raised public money.

Instead they have cashed in their chips through acquisition by Google, Yahoo or established media companies such as CBS or News Corp.

Tom Raftery, a technology consultant who is widely seen as an authority on current web trends, believes one of the problems is that high profile acquisitions are resulting in a rash of copycat services. "For every good idea you probably get another 20 companies trying to copy it," he says.

In the intervening time, development and operating costs for internet businesses have tumbled.

"Business ideas that may have needed $10-20 million (€7-15 million) first time around, can now be done for a million dollars," says Raftery. "As a result the losses to investors will be a lot less if it does crash."

On a recent visit to Dublin, Steve Mills, head of IBM's software division was enthusiastic about the potential for Web 2.0 technologies to improve knowledge management. "What we've been quite surprised at is the amount of enthusiasm we've been seeing from all kinds of companies . . . who are all recognising that one of their big productivity problems is that people waste time trying to get answers," said Mills. He dismissed much of the hype surrounding Web 2.0 saying it is nature of the tech industry to hype the latest new thing.

"Buried in the hype is the reality of value," says Mills. "Even with the huge Web bubble from 1995 to 2000, the lasting benefits I don't think have been catalogued very effectively. Everyone loves to point out the failed dot coms, the bad business models and so on."

Only time will tell if in another five years we will be pointing out the failed Web 2.0 firms littering the Net.