Could Advertising Hurt Web 2.0

The Web 2.0 transformation has re-written the internet stories of the mid to late 1990s. These stories have re-established the internet as priority number one for entrepreneurs and advertisers.

Perhaps the one story that got the most public attention was Google's purchase of YouTube for $1.65 billion in late 2006. The site was sold by its founders Chad Hurley and Steve Chen, just two years after they launched on a shoestring budget.

But, there's also FaceBook, MySpace, Delicious, Squidoo and many more Web 2.0 success stories.

Until recently, one thing has been lacking from these websites — advertising. When YouTube was sold to Google last year, it didn't have any advertising, neither on its pages or the videos it broadcast. And only recently has advertising begun to creep onto the pages of StumbleUpon, Delicious, Reddit and other popular Web 2.0 websites.

So, the questions remain. Did these sites become people because they didn't have advertising? Or, were their founders not as concerned with revenues in the startup stages? And if so, could the recent move by Web 2.0 websites towards building advertising revenue have a detrimental affect?

Some of the earlier viewer comments on YouTube stated the hope that the website would not go the way of MTV, by bombarding viewers with advertising and marketing messages. So far, YouTube has kept advertising low key. YouTube provided another channel for their very popular Adwords program. Because many users were already intimately familiar with Google's ads, they didn't seem to care about them being on YouTube.

As another example, Reddit.com has been accepting advertisements since March 2007. But Reddit approached it differently. Just as Reddit users can vote negatively or positively for internet content, they can also now vote for and against advertisements. In theory then, if an ad is popular it will get more exposure, if not it will be buried. But, this may not prove viable in the long run. Users are already hostile towards anything that might be related to advertising or marketing.

Advertising is still seen as a valid revenue model. It worked in Web 1.0 but only in the short term. It's no surprise then that the big Web 2.0 names are seeking to cash in on their huge audiences by using advertising. It's yet to be seen, though, if advertising will be profitable in the long run.

In truth, now that these sites have gained such massive audiences, it is unlikely that increased advertising will drive users away en masse. Web 2.0 sites, and the advertisers that use them, will need new and creative approaches to reaching audiences. Web 2.0 has given people a voice. And they're not afraid to use it.

 

Written by: David C Skul - CEO

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