YouTube and the dilemma of its business model

Internet ventures have long been a phenomena that is very difficult to understand. On one hand, the internet or the web has been wildly successful that there is a wealth of information (and disinformation) at the click of a mouse button.

Yet, on the other hand there have only been very few successful businesses. The successful ones are the likes of Google, Yahoo etc, but very few others.

So what drives venture capital funds to the web?

The dotcom bust in the early 2000s brought things back to reality. Yet, now we see the second wave of the web… called web 2.0.

Web 2.0 is primarily used to describe the second wave of web ventures which draw primarily from the internet community itself. Sites like mySpace and YouTube are the recent prime examples of community based sites achieving wild success (at least in terms of eyeballs).

The question now for the likes of YouTube – is this sustainable? What do you think? Is the free-for-user-and-hope-to-get-advertising-revenue model workable?

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