Maybe There's Not So Much Money in Web 2.0? - SaaS Week

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February 19, 2008
Maybe There's Not So Much Money in Web 2.0?

Web 2.0 is certainly raising some new concerns for businesses (and by the way, if you're interested in Web 2.0, you should be sure to sign up for ebizQ's Web 2.0 and the Enterprise Virtual Conference.

Mark Anderson at TheStandard.com posted a blog about how businesses should tread carefully and consider the users before implementing lofty revenue schemes.

He points to a recent Business Week article that tracked a new phenomenon -- the novelty of Web 2.0 may be starting to wear off. BW writers Spencer Ante and Catherine Holahan cautioned that estimates in the growth of Web 2.0 might be a little overenthusiastic; growth rates are slowing and the average user is spending less time on the sites. Users are not clicking on ads, and sometimes, they're even getting sick of the ads and abandoning the sites altogether.

Anderson predicts that revenue projections by Web 2.0 companies are going to turn out to be way too optimistic, and he muses that the lack of a business model for the Web 2.0 concept may be partially to blame, ending in a pretty good conclusion:

The lesson to future entrepreneurs should not be confused. Don't go out and get a million eyeballs, and then try to monetize them. Go out and get a million customers.