Bebo vs Sharethis

Widgets, like the name suggests, are little things, not fully fledged services – they are the shareware of web and may have eyeballs worth as little as PKZip (remember that): Zip! Caveat Investor: very few widgets should be companies.

What is the connection between Bebo, who were acquired for $850M today and Sharethis who have just raised a Series B of $15M from DFJ?

The connection is that Sharethis’ page views, which justify such a high valuation for a widget, are worth less than the sub 50c CPM for social networks that is already spooking the ad driven online ecosystem.

Sharethis’ series B will be based on the idea that they can fold in ads to the widget, rather like Feedburner did with RSS. But the ad opportunity, the value ad, and the switching cost are not the same as Feedburner, and the reach is nothing like the ginormous number that might have critical value.

This is a bubble that will collapse soon. Why? Because if you believe the hype, then the little pagecounter widgets you put at the bottom of a page are worth more than the page, Sitemeter would be worth a billion.

Sitemeter is not worth the same as Bebo. A widget on a page is worth less than the page itself and people can switch widgets.