Overrated Small Business: Traffic-Driven Websites

The biggest success stories of the so-called Web 2.0 era have at least one thing in common.

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Facebook, MySpace, YouTube, Twitter. The biggest success stories of the so-called Web 2.0 era have at least one thing in common: They're not actually selling you anything. These companies aren't interested in digging into your pockets; their attention is focused on Web metrics like page views and unique visitors, which typically translate into advertising revenue.

It has worked for television and radio, so why can't websites that are totally dependent on advertising succeed? They certainly can, but just as there are relatively few radio and television stations, there are relatively few websites that actually turn a profit on their advertising dollars. "The problem is that in order to make big money from ads, you need millions of people going to your site every day," says Rosalind Resnick of Axxess Business Consulting. Even though BlackBerrys and other devices are making it easier, people have only so much time to browse the Internet. Since competition is so fierce, it will be very difficult for any website to get millions of visitors.

Of course, that difficulty won't stop many Web-savvy entrepreneurs from trying. But they should first realize that while Facebook and MySpace get more press than other entrepreneurial opportunities, following in their footsteps is harder than with other types of start-ups. "The Googles and the Facebooks get so much publicity," says Steve King, research affiliate at the Institute for the Future. "But those businesses are really rare. It just gets so much hype."