Richard Macmanus discusses how Web 2.0 and a lot of the new sites/applications/tools seem to be relying on page views and the advertising dollars they generate as their business model.
He is right that this is one step better than the dot-com bubble because then most companies were hoping the page views alone would lead to an IPO or acquisition. At least now there is advertising revenue attached.
I think we should be questioning the validity of new tools and applications aimed at relying on advertising alone. Don’t get me wrong, I work in advertising and think it has a strong future, but it also means you’re often putting your company’s livelihood on the line for something that you don’t necessarily control and can be cyclical.
My advice to startups would be to make advertising a strong piece of the puzzle, but to build something good enough that you could potentially charge for it or have other ways of earning revenue to build from.