Popularity Might Not Be Enough for a Web 2.0 Ste to Succeed

[Kristijntje]

LET’S say you wanted to build an advertising-supported online media business that took in $50 million a year in revenue. How many users would you have to attract to get there?

Probably too many for most people to even try...even the type of site that can get the largest advertiser payments per user would have to be immensely popular before it made that kind of money...

“This may be why more entrepreneurs are going for low-investment sites that don’t need an exit but provide ‘lifestyle businesses’ for their owners,”...

That is, rather than seek venture financing and hire a staff, it may be better for one or two people to create a relatively simple site — say, a hobbyist blog for guitar enthusiasts — and use a service like Google AdWords to, hopefully, make enough money to live on....

full article: http://www.nytimes.com/2007/03/17/busine....html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1174308292-cJNRiBDh1eZkhbn4evgIlg

As a venture capitalist, I’m interested in investing in companies that could be big one day, that could get to at least $50m in revenue.

Here are three ways to get to $50m in revenue as an online media business; indulge me in some math...

1. Be a site with a broad reach (say general social networking, communications, news)...
2. Be a site with demographic targeting (say a Latino portal, or a sports site (targeted at men...
3. Be a site with endemic advertising opportunities (say a site about movies that movie studios will want to advertise on...

full article: http://lsvp.wordpress.com/2007/02/26/thr...n-revenue/

followup:

As my previous post indicated, it is not easy to build an online media company to $50m in revenue. Depending on whether you’re broad reach, demographically focused, or can support endemic advertisers, you need to get to top 10, top 25 or top 125 levels of US website traffic.

A couple of interesting studies have come out recently that underscore how difficult this can be...

full article: http://lsvp.wordpress.com/2007/03/14/mor...-revenues/