
Web 2.0 is more about toys than anything - keiretsu

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bilbo0s
Actually, Facebook generates a great deal of revenue via advertising. That
said, I will concede that the ad based Web 2.0 business model has yet to be
tested in an economic downturn. This is something that could leave a Web 2.0
company at the whim of unscrupulous hedge fund managers in the public markets.
If their revenue proves to be susceptible to downturns, it will be a less than
happy time for Bay area employees. Still, perhaps these companies will be able
to come up with a new revenue generating product line. I know that most Web
2.0 entrepreneurs can trot out a list of other "business models" a mile long.
However, the issue with them is that they generate revenue in the millions in
'best case' scenarios. What the markets would be looking for is revenue in the
hundreds of millions, or billions. At a MINIMUM tens of millions in the 'worst
case' scenarios.

I think that Facebook has the best chance of ALL of the Web 2.0 sites to make
a run at the public markets. Maybe they can charge the users for access later.
Or perhaps they can charge all of the developers for access to the platform
API. Maybe they will make contracts with advertisers that span YEARS while the
internet ad boom is hot. That way they will still have money to get them
through to the next ad boom. There are a lot of things they could do.

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bilbo0s
OK . . . I got one.

Maybe Facebook is even more clever than I gave them credit for. What if they
use the platform to stage different features, all implemented by different
companies, and some of these companies are WILDLY successful in charging a
price for their product. Facebook could buy these companies or replicate the
services and boom, they have another revenue line.

Shady, but it works.

~~~
create_account
Most Facebook users are students, so how can you expect them to shell out cash
for products or services?

If Facebook ads don't result in more sales, advertisers will give up on
Facebook eventually.

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far33d
Well, students are a great market for the credit card industry, so they must
be spending that money SOMEWHERE.

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mynameishere
Facebook will go the route of myspace will go the route of friendster will go
the route of Yahoo! Geocities. That's the problem. Throw them away, and a
million clones will fight for their place. Meanwhile, Proctor and Gamble still
sells rendered hogfat for billions a year.

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run4yourlives
Counterpoint: 37Signals (and their products)

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keiretsu
this is an effing retarded counterpoint. Boy are their biz model scalable to
hundreds of millions.

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run4yourlives
You asked for a scalable business model, they have one. They're profitable and
they are more than likely breaking a million or two in earnings already.

If you aren't interested in an intelligent conversation, go read digg.

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sabat
Blogga, PLEASE. You know that's not true.

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keiretsu
I have yet to see any true ipo-able web business to appear so far. When i mean
truly ipo-able, i mean it has a REAL business model and one that can scale to
billions. Something like Paypal or Ebay. Let's face it, Youtube, Facebook are
all toys. They have eyeballs but no scalable business model. The best hope
i've seen so far is Prosper.com. It doesn't have the massive eyeballs yet but
hey, at least their biz model is scalable.

Does this mean that all the good billion-dollar ipo-able web ideas have been
taken up? Is this it?

~~~
steve
You're worrying too much about respect a company gets. It's not about that.

If a company makes a billion dollars selling retarded pink web2.0 bunnies
while you built high power laser communication systems and made one tenth that
-- as a company, they have won.

~~~
keiretsu
Who is talking about respect here? I'm talking about biz models!

Most web 2.0 co. are based on advertising revenue.

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steve
There are ad based companies that make far more income than non-ad based.

I've come to the conclusion that advertisers and many websites can get far
more money out of people than either can individually. I don't like it either,
but that's how it seems to be working.

I've been thinking about this a lot lately. It would be nice to see some
actual numbers.

