Actually, Facebook generates a great deal of revenue via advertising. That said, I will concede that the ad based Web 2.0 business model has yet to be tested in an economic downturn. This is something that could leave a Web 2.0 company at the whim of unscrupulous hedge fund managers in the public markets. If their revenue proves to be susceptible to downturns, it will be a less than happy time for Bay area employees. Still, perhaps these companies will be able to come up with a new revenue generating product line. I know that most Web 2.0 entrepreneurs can trot out a list of other "business models" a mile long. However, the issue with them is that they generate revenue in the millions in 'best case' scenarios. What the markets would be looking for is revenue in the hundreds of millions, or billions. At a MINIMUM tens of millions in the 'worst case' scenarios.<p>I think that Facebook has the best chance of ALL of the Web 2.0 sites to make a run at the public markets. Maybe they can charge the users for access later. Or perhaps they can charge all of the developers for access to the platform API. Maybe they will make contracts with advertisers that span YEARS while the internet ad boom is hot. That way they will still have money to get them through to the next ad boom. There are a lot of things they could do.
Facebook will go the route of myspace will go the route of friendster will go the route of Yahoo! Geocities. That's the problem. Throw them away, and a million clones will fight for their place. Meanwhile, Proctor and Gamble still sells rendered hogfat for billions a year.
I have yet to see any true ipo-able web business to appear so far. When i mean truly ipo-able, i mean it has a REAL business model and one that can scale to billions. Something like Paypal or Ebay. Let's face it, Youtube, Facebook are all toys. They have eyeballs but no scalable business model.
The best hope i've seen so far is Prosper.com. It doesn't have the massive eyeballs yet but hey, at least their biz model is scalable.<p>Does this mean that all the good billion-dollar ipo-able web ideas have been taken up? Is this it?