According to The Economist (19/03/2009), the business model for the Internet (firms offering free content and services online, in the hope that they would eventually be able to “monetise” the resulting millions of “eyeballs” by selling advertising) have proved to be unsustainable in 2001, and this may be just as applicable today.:
http://www.economist.com/opinion/displaystory.cfm?story_id=13326158
Thursday, 26 March 2009
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Interesting article and looking fairly accurate at the moment. none of them have a real critical mass except the biggies, yes some have a reasonable potential reach but most are not commanding any real volume of money. from what i understand the server costs on Facebook are horendous and the total income is not a lot. The problem comes is that if they start to charge for viewing info, impressions collapse and ergo the revenue model collapses. It will be interesting to see how long fast growing sites can sustain server costs with little or no income. Most revenues are horrendously overstated and actual CPM are minimal. With cookie wipe software now pretty much the norm this will eat up huge trenches of advertising impressions making it even more difficult to deliver revenue. The next few years will be interestin and probably only the strong will survive
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