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There are a whole rash of web companies that are hoping to make their money by selling advertising targeted at people already oversaturated by advertisements. I wouldn't be surprised if there is another tech implosion coming because of this. Perhaps it won't be as dramatic, since the amount of profit expected per dollar invested is more reasonable, but there are a lot of companies that have gotten funding for a handful of millions that are going to disappear.
Advertising can't support all of the software that people want to use. Advertising is easier than finding the right price point. But if people want to use your software at a price point that more than covers your costs, you've got a business.
Growth-orientation is another failure point in the way companies are valued. Bigger is not always better.
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