
The scary math behind Web 2.0 - gibsonf1
http://news.com.com/8301-10784_3-9710510-7.html?tag=nefd.aof
======
Sam_Odio
Ok, so we won't be trading Justin.tv on the NASDAQ... did anyone really expect
to?

I think we should be more focused on profitability - not IPOs. Honestly, the
chances of any of us creating an IPO-worthy company are pretty slim. But, as
long as we create profitable companies, then we're set. And you don't need 1B
page views / month to be profitable.

If you're generating cash, there's no pressure to find an exit strategy. And
if you do want out, there will ALWAYS be investors willing to buy you.

------
jeremyliew
I spoke on this topic at the Web 2.0 expo on Wednesday and have blogged on it
in the past.

presentation available here:

<http://lsvp.wordpress.com/2007/04/19/presentation-at-web-20-today-show-me-
the-money/>

------
npk
The result presented in this article is fascinating.

If you're going to support your business through pure advertising, you need 1B
hits/month to make $5M/month. Clearly there's a linear relationship.

This is an interesting fact.

~~~
npk
1B views=5M$ is an approximation to first order. I'm sure I could be convinced
the CPM is off by a factor of 5. However, there's got to be a fairly hard
minimum sales/month for an IPO: I didn't know it was $60M/year.

If your goal is to form a business that will make the founders rich, it's good
to have some numbers floating around in your head. Maybe I was the only one,
but I didn't have these numbers in my head, and I felt they were educational
:)

