The dotcom crash of 2001 is a spectre that haunts anyone who makes their living on the internet. Those who work around what’s often called Web 2.0 are particularly sensitive about it because if another online slump materializes, that’s where it will strike.

But what will be the harbinger of a Web 2.0 crash? According to Dave Winer, that grand oldish man of blogs, RSS and OPML outliners, it will be signalled by the busting of Google.

… today we got the first rumblings of the shock that will signal the end of the bubble. Google stock will crash. That’s how we’ll know.

When I realized this, I should have known, because I’ve been saying for almost a year that Web 2.0 is nothing more than an aftermarket for Google. Startups slicing little bits of Google’s P/E ratio, acting as sales reps for Google ads, and getting great multiples for the revenue they generate by fostering the creation of new UGC to place ads on. When Google crashes, that’s the end of that, no more wave to ride, no more aftermarket, Bubble Burst 2.0. And the flip of this is also true — as long as Google’s stock stays up, no bubble burst.

Currently Google stock is riding high around $500 and forecast to go to $600 within a year. But stranger things have happened.

Now we hear this : “Google shares, which topped a milestone price of $500 a share last week, are overvalued and poised to fall, says Barron’s financial newspaper.

New.com reports : “Barron’s said Google is overvalued because it trades at 37 times next year’s expected earnings and because its growth rate is slowing.”

Is the bell already tolling for Google and Web 2.0?

So they did it. Despite the warnings of corporate lawyers and internet icons like Mark Cuban and Jason Calacanis, Google has bought YouTube for more than one billion dollars. Here’s the official announcement :

“Google announced today that it has agreed to acquire YouTube, the consumer media company for people to watch and share original videos through a Web experience, for $1.65 billion in a stock-for-stock transaction. Following the acquisition, YouTube will operate independently to preserve its successful brand and passionate community. […]”

It should be said that Jason has since come round and now applauds Google’s move, largely, he says, because Google is the only bigco that could make it work.

We shall see.

Mike Arrington of TechCrunch is reporting that a rumour is circulating that Google may buy Youtube for around $1.6 billion.

“A quick phone call to a VC confirmed that the rumor is circulating (he also confirmed the price), but that is far from confirmation that this deal is happening. I’m digging for more but the source on this one is very good.”

His counter-intuitive point is that Google won’t be put off by the many irrate copyright holders whose rights have been breached by YouTube — they are now trying to strike deals with the owners.

Of course, Google would have to add the legal costs of these defences to the $1.6bn price of the property. Is that a good idea?

Arrington thinks it’s about 40pc likely. Time will tell.

Google today announces a selection of gadgets for your website.

Google Gadgets for your webpage can help make a site dynamic and rich with content. Google Gadgets, which have long been available for users to add to the Google homepage and Google Desktop, are now available for webpage owners to add to their own webpages. Google Gadgets are miniature-sized objects that offer cool and dynamic content that can be placed on any page on the web.

“Now anyone can have a great-looking website with automatically updating content,” said Adam Sah, Google Gadgets Architect. “By making Google Gadgets available for you to add to your webpage, we’re working to connect developers with enthusiastic consumers and to make information universally accessible and useful to the individual user.”

There are games, news clips, weather reports, maps, and much more.