Mathew Ingram notes that Technorati is on the death spiral - and he points to a December, 2006 post from Om Malik that explains the root of the problem: Google blog search. As to Technorati:

In his farewall post, Sifry says the company will be run in the interim by a committee of the board (trust me when I say this is rarely a good sign), and that the search for a CEO continues. The Technorati founder says he will continue to be “engaged strategically from the point of view of a director on the board.” According to his post, he will be chairman.

It's hard to be in the same field with Google, and it looks like Technorati won't be for much longer.

Update: Jason Calacanis thinks Technorati's problems are a sign of general "web 2.0" market issues:

Technorati *laid-off* eight people today. I have not seen a LAYOFF situation since 2002 I think. This is significant because Technorati didn't say restructuring. They said we don't need these positions and we can't afford them. Dave says in his post, in fact, that they are scaling the business in line with their revenue. Why would you scale a growing business to revenue!?!? Why not keep scaling it up!??! Oh, right... the market is changing...

Not sure I agree with that. The market may be changing, but Technorati most certainly has not been growing - they've been having problems vis-a-vis Google. In this case, I think we're seeing a continuation of the search market consolidation that started with Google's ascendance. There may or may not be a "web 2.0" bubble getting ready to pop, but I don't think I'd read much into this particular set of layoffs.

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