So, what is the real business model for Web 2.0?

When will Web 2.0 startups start making money? The fact is, it's incredibly hard to make money as a Web 2.0 startup aimed at consumers.

When the news corporation added MySpace to its portfolio nearly three years ago, it expected that if its base of 16 million users kept growing – and each user kept adding friends, sharing photos and swapping flirty messages – the advertising dollars would roll in. The social networking site has grown to 118 million worldwide users and the flirtations have not stopped. But the cash is not coming in as quickly as the company had hoped.

Social networks, for instance, are upended how we think about friendship, and politics, and staying in touch, and the creation of brands. But their revenues aren't as impressive as the sites outsize impact on our lives. YouTube also seems to be struggling. Though you wonder what kind of problems they might run into if they started foisting ads on folks. The same question applies to Wikipedia.

Is there something about the social part of social media that makes it hard to be commercial? It could be that we spend so much time socializing on these sites that we don't pay attention to, the ads that surround our gossip and our response videos, our fiddling with our widgets, our posting messages on each other's walls. Ads don’t seem very appealing nowadays, they easily get ignored simply because they don’t attract you as much as your ‘flirty’ private messages on facebook for instance.

Google transformed the online world by first generating huge traffic, then finding a business model. But Google's success was based on a fantastically clever advertising mechanism that was automated, attracted new advertisers, and served searchers nearly as well as it served advertisers. Facebook hasn't yet unlocked that advertising secret, and messed up its most important try with Beacon. Twitter has no business model yet. Ning has hundreds of thousands of visitors, but still runs Google AdSense ads. And these are the successes. No wonder people are skeptical.