Web 2.0, "mom-and-pop" style
The Economist featured an article in its March 19 edition called "Making the Web Pay: The End of the Free Lunch -- Again." It's a quick read, and it's interesting food for thought. Just like the Internet bubble burst in 2000, the article asserts that history is beginning to repeat itself -- and Web 2.0 is going to come crashing down, given the current pressure on sites like Facebook and Twitter to develop a business model.
I agree that a viable business model is necessary for any Internet business that plans to generate significant long-term revenues and profits. That's business school 101. And within the next 12 months we'll have a much better idea about Facebook's and Twitter's long-term profit potential.
I think you'll continue to see the Facebooks and Twitters of the world -- online services that generate a large user base first, then try to monetize those users later. Some will survive, others will not. But for every one Facebook or Twitter out there, you'll see 100 websites or online services that aren't as concerned about making money. These are the sites run by avid business owners who view their site as their baby. They want to build a community, provide a solution to a problem, or make the world a better place in a small way...and maybe make a few bucks while they're at it. Sure, these sites will still try to generate some revenue. But they'll survive through inexpensive ads, donations, or simple pay-to-play business models. But because it's a passion rather than a business, the user experience takes priority over revenue.
It will keep these companies small and under the radar in many cases. But regardless of what happens to Facebook and Twitter, the mom-and-pop Web 2.0 sites will do just fine.
I agree that a viable business model is necessary for any Internet business that plans to generate significant long-term revenues and profits. That's business school 101. And within the next 12 months we'll have a much better idea about Facebook's and Twitter's long-term profit potential.
I think you'll continue to see the Facebooks and Twitters of the world -- online services that generate a large user base first, then try to monetize those users later. Some will survive, others will not. But for every one Facebook or Twitter out there, you'll see 100 websites or online services that aren't as concerned about making money. These are the sites run by avid business owners who view their site as their baby. They want to build a community, provide a solution to a problem, or make the world a better place in a small way...and maybe make a few bucks while they're at it. Sure, these sites will still try to generate some revenue. But they'll survive through inexpensive ads, donations, or simple pay-to-play business models. But because it's a passion rather than a business, the user experience takes priority over revenue.
It will keep these companies small and under the radar in many cases. But regardless of what happens to Facebook and Twitter, the mom-and-pop Web 2.0 sites will do just fine.
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