• The Wall Street Journal (by subscription), Tuesday, October 17, 2006 11:30 AM

Here's a healthy dose of reality for Web publishing startups: The top 10 Internet ad sellers control 71 percent of the online ad market, according to numbers from the IAB/PricewaterhouseCoopers. Online advertising is making many Web publishers rich, but for every Google or YouTube, there are hundreds of Web sites that won't attract enough traffic to survive. That brings to mind the late '90s, when lots of Web companies tried to stake their future on online advertising--and failed.

Of course, back then, connection speeds were slow, and ad technologies undeveloped. Now, online advertising is proven--but the content, in many ways, is not. Photo sites, social networks and video-sharing sites are all the rage, but none of the myriad startups employing these services have established a firm, healthy business model. Aside from YouTube, which amassed a huge, loyal user base, skeptics say few of today's Internet companies will fetch billion-dollar price tags. Once the VC money runs out, expect the pretenders to start falling away soon.

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