Tuesday, May 27

Web 2.0 fails to produce cash

As I keep on saying, where is the money? who is going to pay for all these online gee gaws? See this story. I quote:

Many members of the Web 2.0 generation of internet companies have so far produced little in the way of revenue, despite bringing about some significant changes in online behaviour, according to some of the entrepreneurs and financiers behind the movement.

The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers. Together with the US economic downturn and a shortage of initial public offerings, the failure has damped the mood in internet start-up circles.

I am still confused on who will pay for what? and more importantly, why? Price formation happens when one can compare prices to other assets, in this case, what is the comparison process?

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