UsableMarkets

This article from the FT, and its sister article, also in today’s FT — Web 2.0 euphoria tempered by social problems — are perhaps not news, but a confirmation of what many of us already knew. It’s hard to make money with “Web 2.0″ aps.

The article defines Web 2.0 sites and applications as ones based on user-generated content, and new forms of communication (i.e. Twitter).

Why no cashola from these aps?

1. It’s hard to place meaningful ads into user generated content that is not a turn off to users (i.e. “This Twitter from your friend is brought to you by New Coke!”).

2. Companies that could pay for these ads are not prepared to spend money for untested advertising methods.

I would add that it’s hard to to be successful when you and every other Web 2.0 company (say, two random guys or gals in a garage, or the NY Times) has the same business model. Namely, advertising.

Most Web 2.0 start ups are focused new and interesting ways to help people (read: random web users) to communicate. I would imagine that if they spent less time focusing on new ways to communicate and more on taking existing means of communicating to solve existing problems for specific types of users, they would be a lot more successful … and a lot less reliant on the same business model that everyone else has.

Cash is in short supply

As always, thanks for listening.
~alex