The financial times had reported earlier on the failure of web 2.0 to produce cash, yet it says it has not stopped Continuing round of venture fundraising and acquisitions at high valuations in the web 2.0 field.

There are many new startups which have got funding recently , whether it be twitter which got 15 million or flock , a browser maker which made 15 million last week.

Even in the Indian web 2.0 circle we had reported startups like minglebox , techtribe etc getting funding from eminent venture capital firms.

 So what is it that despite the inability of web 2.0 to fill up the pockets of its founders, is really convincing for both the founders and the venture capitalist firms; something which becomes part of the life of millions of people yet does not give them direct revenue in hand ,is today so much sought after by them?

The philosophy is simple when you have built a product which has potential which directly affects millions of people altogether, you might as well come out with a model which targets them effectively (remember Google!).Every possible web 2.0 site like social networking sites, micro blogging sites, and social bookmarking sites is unique and for sustainability they will invite revenue models which are built around their structures and will definitely take into account that it in no way hampers the “social” experience of its users. The value appears to be in the number of users that they can get as quickly as possible.  So making something that is “useful” and/or “fun” for a large number of people appears to be how to make a Web 2.0 startup. Monetisation is not the key initially.

At WATBlog we analyzed all the possible revenue models which could be possible, this is exclusively for web 2.0 startups

Start of with a CPM /CPC model -

But one thing is for sure in web 2.0 that for better revenue models in the future , the founders  would have to eliminate the possibility of advertisers to actually interact with their sales teams and provide them with models which are more web2.ish in nature .But since most of them do not have the resources, they will have to be content with a CPC or a CPM model as provided to them by various publisher networks which is not possible for their long term  sustainability as Don Dodge points out-

“most social network sites generate CPMs of $0.40 or less. To generate $1M in ad revenue would require 2.5 Billion page views. Not many sites attain that scale.”

Devising your own Web 2.0ish advertising model -

Since Facebook and MySpace have come out with a customized ad network this might bring about newer companies into picture which specially guide in devising your advertisement for these social networks like there was birth of new SEM specialist companies built around the Google adsense model. This is where our sister concern WATconsult.com can help you out.

 (MySpace’s Ad Network; Facebook’s Ad Network)

Fun 2.0 = money for you 

For community based information sites like pagalguy, the best solution could be a social shopping, community branding or collaborations with social networking sites like designing widgets. Socializing online is similar to real life. People want the same sorts of fun, impulse items, and entertainment online, and people are willing to pay a few bucks for them. The net profit on these impulse items is huge. So for communities, model could revolve around providing them with virtual flowers, widgets, icons and related stuff via communities. Though beware, Facebook’s Beacon also attempted to leverage the social network and user intentions into a new advertising and revenue model but user privacy is the most important consideration in this regard.

Premium for quality-

For media sharing sites such as Youtube , Flickr, Slideshare , either they could think of advertisement embedded products , but in my experience this will go down as against quality user experience and hence their reputation. Since they are free they could think of a model of free service with premium upgrades for Eg. Youtube could bookmark quality users and their videos making them viewable only after paying a premium.

Harshil Adds: YouTube is already exploring something called Buzz Targeting where they use algorithms to capitalize on Videos that are likely to go viral.

In my opinion web 2.0 bubble is here to stay at least for some time now, though its still imperative to say how newer startups like twitter are going to make money. Though today a lot of models have attracted capital, only those which provide quality service in the long run will survive. So are surely going to witness a web 2.0 bust , when is something that only time will tell.

Bookmark this post to:

Most Commented Posts

• Be a BIG part of the next BIG thing! Join WAT!
• Now Women Meow On FM Radio!
• Salman Khan Joins Bollywood Brigade Of Bloggers.. Starts Blogging On Dus Ka Dum Blog!
• Pulsar Mania goes Viral
• Matrimonial shoot-out: Shaadi vs BharatMatrimony vs JeevanSathi vs SimplyMarry