• Advertising Age, Monday, October 20, 2008 11:45 AM

For years now, Web 2.0 companies--social networks, video sharing sites, whatever Twitter is--have been launching and expanding at incredible rates, all on the assumption that if they got big enough and reached enough people, the advertising would be there. But what if they're just plain wrong?

This could become painfully obvious in the next few years thanks to the economic downturn, say industry observers. In tough times, advertisers not only pull back, they run for the safe haven of familiar and reliable media outlets. "When you have a contraction like this, people stay with the best brands," said Andy Chapman, a digital media buyer at WPP unit Mindshare Interaction.

This could mean trouble for the ad-supported model that so many Web 2.0 companies rely on--or have been planning to rely on once they figure out how to integrate advertising into their service. "The vast majority of stuff is not going to be ad-supported; they can't be," said one veteran of Web start-ups. "There is going to be a revolution in that people are going to have to start paying for really useful productivity tools."

Read the whole story at Advertising Age »