I find the difference in tone between the investor-focused digital media conferences and advertiser-focused digital conferences very interesting. Whereas advertiser-focused conferences revolve around the foregone conclusion of advertiser dollars migrating to the Web and the hundreds of technologies and properties that will make the migration possible, digital investment conferences are focused on figuring out what select few of the digital media plays will actually pan out from a business model perspective. The subject matter is surprisingly similar, but conversations end in very different places.

One of the questions that was asked of the panel that struck me was this: Given the current climate, should investors be looking at content- or technology-focused ventures? My answer was too longwinded for this column, but the short politician's answer is: yes.

The more I thought about this after the panel, the more I realized that you couldn't possibly separate the two in a successful venture. Content creation companies won't fare any better than traditional content creation companies, and in many cases will fare much worse, if their technology doesn't improve the media consumption experience. Technology companies really don't serve a whole lot of purpose without being applied to some sort of media-reaching consumers in the end. Sure, you can be a pure-play backend technology firm, but at some point your innovation needs to be adding value to digital media consumers.

Good investments in the digital media space, in my totally unqualified opinion, are those that can answer a couple of key questions positively. How simple is the concept at its most basic (see: when a person searches for "car," let's show him advertisements for cars)? How much does the concept require people to change their natural media consumption/interaction habits (best ideas make something people are already trying to do much, much easier)? How does this concept make money (everyone's favorite)?

The reason for the title of this article is that it's hard to argue that digital media companies have fallen short on their end of the bargain on the last point, making money. And the dangerous game that is being played is that VCs are propping up digital media companies that have enough consumer attention (eyeballs, users, traffic...) whose business model SHOULD be supported by advertising -- but it just hasn't happened yet.

The problem here is that you are counting on one of two things happening for the digital media company you invested in to make money: 1. It will become proficient in the industry of advertising and advertising sales, or 2. Another company in the digital media monetization space will break the dam that properly aligns advertising spend with the amount of time people spend on a particular digital media property.

The issue here is that just because at a macro level it doesn't make sense that advertising spend is not aligned with where people are consuming their media, does not mean that the market has to adjust in a "reasonable" time. So investors are left playing a dangerous game of valuing companies based on what they should/could generate if the advertising nut is cracked. Not that they have a choice -- if the spend doesn't adjust, advertisers risk missing the massive upside that justifies the risk. It's not digital media companies' fault, they have created value for millions of people.

But the question that came out of the panel that no one could answer is this: Will advertising spend adjust before a bubble bursts again? Where should investors be putting their money: in companies that are trying to solve the monetization issues, or the media companies that are creating the audiences? Consumer-facing or advertiser-facing? Think about the most successful company in online advertising. Too me the answer is, the biggest opportunities are companies that represent both. What do you think?

This commentary is insightful. I recommend it to others.