Digital zealots in danger of fuelling a reprise of 1999

Is 2007 starting to feel a bit like 1999?

Perhaps not for Manchester United fans, who saw their dreams of a repeat of 1999's treble-winning feat shattered in Milan last week. But some of the cooler heads in media are starting to see similarities with the Emperor's New Clothes digital ballyhoo of eight years ago.

No one expects a dotcom crash to follow as it did in 2000, but the next year or two may see some burning of fingers and a period of less excitable reflection.

As in 1999, the latest digital boom is being fuelled by a soaring stock market awash with venture capital and private equity money, and analysts eager to write up a company's prospects on the first whiff of a digital acquisition.

Yet the payback on most digital ventures is obscure to say the least, as is their strategy. Has anyone yet worked out why ITV paid £175m for Friends Reunited? For every Google there is someone blundering in the dark.

Last week ITV unveiled its £20m revamp of with VoD at its heart. With Sky+ the solution to missed viewing, why anyone would want to watch TV through a computer instead of their 38-inch plasma is beyond me.

With Coronation Street still able to pull in 13.8m viewers on a Monday night, TV is still event viewing watched in real time, and ITV, C4 et al should be investing in must-watch content, not technology for secondary platforms with tiny audiences. Are we being led by the habits of teenage geeks living remote lives in their bedrooms?

That brings me to that that other over-hyped entertainment phenomenon of the era - Second Life, a gathering place for dreamers with too much time on their hands, spending thousands of dollars pursuing an alternative self. Where middle-aged men are reborn as pouting, boob-tubed, hot-panted dollies, having virtual sex. How dubious is that? It's no surprise that the top-10 visited areas of Second Life are dominated by porn services.

Yet this hasn't stopped blue-chip corporations rushing to gatecrash the party, like an embarrassing dad on the wedding banquet dance floor. Visa is the latest to buy an island on Second Life, though it still hasn't worked out what to do with it.

Second Life? Get a life! - Colin Grimshaw is the deputy editor of Media Week.