One important thing to remember is that company valuations in technology are not set by any current metric (discounted cashflow, multiples of revenue), but perceived future value. Facebook may only be taking in 8 figures in revenue each year, but certainly has future potential on the order of billions of dollars.
I think we are seeing another period of web standards being set (Ebay, Amazon, etc were the standards of the previous boom). Wasn't Bezos big in the 'get big fast' strategy? That will work, but only for a very select few.
I agree with some of his premise, in that relying solely on advertising dollars is a huge risk to any potential revenue model, but it does not mean that there won't be winners in that race. After some experience, I'm pretty confidant in saying that advertising-only models are VERY hard work and require a massive amount of network effects.
The lack of defensibility in Web 2.0 is also quite troubling to me, as it seems like if you create something worthwhile, you may be stuck in the no-man's land of free AND not enough page views to support the ads-only model. Perhaps that's when we'll see a permanent change in nomenclature from 'web products' to 'web services'?
I think we are seeing another period of web standards being set (Ebay, Amazon, etc were the standards of the previous boom). Wasn't Bezos big in the 'get big fast' strategy? That will work, but only for a very select few.
I agree with some of his premise, in that relying solely on advertising dollars is a huge risk to any potential revenue model, but it does not mean that there won't be winners in that race. After some experience, I'm pretty confidant in saying that advertising-only models are VERY hard work and require a massive amount of network effects.
The lack of defensibility in Web 2.0 is also quite troubling to me, as it seems like if you create something worthwhile, you may be stuck in the no-man's land of free AND not enough page views to support the ads-only model. Perhaps that's when we'll see a permanent change in nomenclature from 'web products' to 'web services'?