Not all Web 2.0 companies are down in the dumps. The ones that actually earn money from customers rather than Google's AdSense program have a better chance than most.
One of those companies is Blurb, whose CEO is pictured at right. While traffic figures indicate Blurb may be ahead of its time, the startup should be judged by its income statement. And it was boosted ever so slightly last month when I purchased a gift for my dad on the company web site.
Blurb got even more dollars this week when it raised $2.5 million in debt financing from Hercules Technology Growth Capital. The deal comes only six months after Blurb raised $12 million in second round funding from Canaan Partners and Anthem Venture Partners.
Since most Web 2.0 startups are media businesses of one sort or another, a very high percentage will fail to corral enough of an audience and die by the advertising dime. It's already happening. While the upside is lower, a higher success rate will be attained by startups like Blurb, which have based their Web 2.0 business models on e-commerce rather than ads.
For more on Blurb, see:
IT Conversations
Wired
Tags: blurb, lulu, canaan+partners, vc, venture capital
Continue reading below
Yes, the issue of where revenues originate from is big. Companies who are able to leverage web 2.0 interactivity and usability to generate revenue from actual economic transactions instead of relying on AdSense dollars are the long term winners of this wave. Nice post there!