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18 April 2006 07:45

The Impact of Emerging Technologies: Web 2.0's Startup Fever - Technology Review

by vista (via)
This explosion of new Web sites -- a phenomenon often dubbed "Web 2.0" -- is great for all kinds of Internet users. But how long can this new crop of startups survive without charging for their products? The answer, in some cases, may be not long. Simply put, many of these outfits, much like their dot-com predecessors in the late 1990s, don't have business models. The most common revenue source in the Web 2.0 world is contextual advertising -- but, as some analysts point out, the nickels and dimes earned when visitors click on ads provided by the likes of Google's AdWords barely bring in enough to cover the costs of Web server hardware. Consequently, some industry watchers believe that a shakeout is likely within the next 12 to 24 months.

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