Because Its Possible.com

Everyone has heard of the great .com bubble. It was basically the over-valuation of .com companies. At that time most business had no standard business model, no way to make money. The main way to make money was ads. How is this different from todays Web2.0 companies?

There have been a lot of purchases recently, such as YouTube and Feedburner. Eric Schmidt said that Google probably buys a new startup every week. So how will these companies make money, well of course ads…sound familiar yet? So Google buys DoubleClick for $3.1 billion. Which makes sense in my opinion, DoubleClick is the ad agency (lest Google), and has a lot of valuable ad contracts. Microsoft freaks and buys some company no one has ever heard of for $6 billion! This is a crazy deal, they paid more than 180% the share price!

The fact that companies are purchasing ad companies left and right for obscene amounts om money. The aQuantive deal is the biggest buy Microsoft has ever made! If this isn’t a sign for something, I don’t know what is. The big players get that for the new Web2.0 companies to survive and make money then they will need to publish ads. Not many will pay to use digg, unless they somehow think up paid benefits that doesn’t monopolize the democracy of digg posts. Most companies business model is just to sit tight and wait for a Google/Yahoo/Microsoft to buy them. They way to make money is not through IPO’s, its through either ads or paid services.

So what is the issue with this? Well web2.0 companies may need to think of new business models, or essentially not rely to much on standard ads. Consumers can only take so many ads, and some consumers, like me just block ads altogether by using firefox extensions such as adblock and adblock+. The use of new ads such as video ads in front of a video from YouTube seems like a promising idea. Marketer’s never stop thinking up ways to get mind share without over populating people’s heads with ads.

Of course who am I to say that banner ads are not a way to make money, I have Google ads on my site. What I am saying is that ads or IPO’s are not the only ways of making money online.