July 17, 2008
No shock here: the legions of consumer Internet startups plan to build a huge audience, then to monetize the audience by putting ads in front of them (and/or flip the company to a portal to let them monetize).
There are two problems I am seeing with this mindset.
First, actually making an ad supported media business work is hard, and more often than not the entrepreneurs who are able to build web properties that attract large audiences don’t have a clue how to build a media business.
Over breakfast this morning with my friend Michael Dearing, we discussed a second negative that is probably more problematic in the long run: the perception amongst web entrepreneurs that you can just slap an advertising model on top of a web property, sprinkle water, and have a real business, has led many to spend much less time and energy thinking about how to make money. While advertising surely is a real opportunity for many web properties, in many cases that is just one slice of the business opportunity, and I think the emergence of more robust web businesses has been stunted by the general presumption that advertising is the cure for all web business models.