Forbes magazine recently had an article about how venture capitalists (VC's) are now only interested in funding start ups that do not depend on advertising for income.
They give the example of online real estate brokerage Redfin. Two years ago, VCs were not interested in the company because their revenue model was to collect fees from people buying and selling homes, rather than from ads. Today, Redfin has gotten five or 6 unsolicited calls in the last few months.
Forbes gives two reasons why the ad supported start-ups are out of favor:
1. Ad rates are down due to the recession.
2. Too many copy-cat social networking and MySpace widget companies.
The Forbes article then mentioned a Redwood City, California based start-up called Renkoo, which let people send things like virtual glasses of beer to their friends, and made money showing ads.
According to the article, in early 2008, they ceased being a viable business when their advertising rates dropped from $15 per thousand page views down to 10 cents.
Thursday, 28 May 2009
Burned Venture Capitalists Now Investing in Web Companies with Non-Ad Models
Posted on 15:44 by Unknown
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment