"Decentralized" is the key word here. Back in 2000, the term Web Consultancy refered to a company with 200+ developers on staff, who would charge you $250/hr to build your site. Nothing ever cost lest than six figures, and any decent site would run you at least half a million dollars.

That is the industry that went away. A few of the little guys (myself included) survived the Mass Extinction, much in the same way that proto-mice survived the alien first strike that killed the dinosaurs.

10 years later, we still aren't seeing any of those giant Consultancies emerging again (at least not onshore). It's just a big mess of little shops. And many of us have product lines to smooth out the revenue curve.

I totally agree with you, but they almost feel like different industries. Back then, old media and F500 companies had to hire the consultants because there was no one in-house to do it. Today, most of those corps have entire departments devoted to web design/app development. Sure, they still outsource some gigs, but it seems like the consultancy industry now focuses on smaller companies (even down to the mom-and-pop level).

Anecdote from 1996 in the UK, back when web consultancy was still relatively small, but growing: fma (my employer at the time) bid for one web design job against competition. When we got the job, we learned that our bid was the highest by a factor of two! And we got the job because we were "reassuringly expensive"!

Folks who don't understand a new field will throw money at it because they want a serious professional to hold their hand. As the old 80s aphorism put it, "nobody ever got fired for buying IBM"; an executive at an FT100 company, dabbling in the web for the first time, would expect to spend lots of money at the steep start of the learning curve. But once they began to get a clue about how difficult (or easy) the job really was, they'd start to play hardball.

And that's what the early web consultancies didn't understand: they were living on borrowed time, and basing their growth on a commodity that could only scale linearly (web developer/programmer hours).

There is even a lively market in blog themes for individuals.

There may be more demand now (I don't about x10,000 more..) but there's a lot more supply too. Many of the "web consultants" Spolsky is referring to were people making 6 figure salaries for barely knowing HTML (not even CSS). The common "15 minute blog" you see in many frameworks' intro could command $n0,000 contracts.

There's no lack of hype in the current web, but that first bubble was really something to see :)