The sale of Ivillage last year for $600 million following the sale of myspace set off another round of get more eyeballs. Ivillage had ad sales of $91.5 million with net income of $9.5 million on around 400 million pageviews a month.
Facebook is currently wishing for a sale of $2 billion with its viewership of 3 million uniques which generate around 6 billion pageviews a month.
To date ivillage has been the only company that has been able to extract some really big revenue per visitor numbers. I expect that once google or some other company builds out their adsense clone taking into account registration data all these mass traffic sites can see a 3 to 7 fold increase in revenues per visitor.
I think the next 3 years will be an exciting time one in which we see a dramatic rise in advertising dollars flowing to large sites. Given how cheap it is to run a website these days there is really no harm in building a site for the sole purpose of getting as many people to visit you as possible. My total costs of operations are only around 20k/month and I can make half of that amount go away by getting ride of my Instant messenger. Thats not bad for a site with 500 million pageviews a month and no employees.
Now i’m sure that many self appointed web 2.0 experts will say that building a site just to get traffic is crazy. But you have to ask yourself, since when has anyone got rich listening to the majority? When you have traffic you have options and there are always many many ways to monitize that traffic. This works unless you are doing something completely crazy like spending a million a month on streaming free videos like youtube.com.
What all this comes down to is VC’s And professional executives have no future in building/funding most of the new internet companies. These days you can create a site and launch it with virtually no costs, assuming you are a programmer and you build it in your spare time. If you are someone who can’t program you need to hire 2 or 3 people and before you know it you already have a hundred thousand in costs. The way I see it, there are going to be 20 to thirty 1-2 person programmer startups wanting to do what 1 VC funded firm wants to do. A VC funded company has no way of competing when it comes to keeping costs low.