Innovating Beyond AdSense and Link Farms

This Financial Times article (behind pay firewall) on former MySpace founder, Richard Rosenblatt, building his next online business strikes me precisely because it seems like there’s nothing there (read the comments here from a 2006 article on the same company). I wanted to read this article to learn something-- I read so much so that I can relate different subjects and ideas in hope of making connections and creating new knowledge. With the cover of the paper calling out this article, I was hoping to learn something new, edgy or innovative.

   Standing around, waiting for the money to roll in.

What I realized is that the former Myspace owner is relying, in part, on the now almost old fashioned business model of relying on Adwords to make money. Not exactly innovative or edgy. I’m not knocking Adwords, lots of people and Web2.0 companies have staked their current and future success on offering free web services subsidized by advertising so we know that the model works but I was expecting more.

In the same vein, another part of his startup’s business model is relying on the hits to various popular domain names, where they’ve setup link farms essentially pointing to other sites. So slap up a bunch of links where people will see the Google text ads and let the money roll in. Again, not the kind of edgy, innovative ideas I was hoping to learn.

Remember, this startup company, Demand Media, has raised $220 million over the last year so they must have some other, more confidential tricks up its sleeve to create audience, build valuable content, and generate revenue. Right? Why else the investment bankers or VCs be interested?

But I’m disappointed by these two examples, using AdSense and linkfarm websites, of their business model. Is this really the future of the web, Web2.0, or new media companies?

Of course, they do get social media: the cheapest way to get users to your site and keep them there is to “give people the tools to create the content themselves.” Well at least they have this part all covered, let the people themselves build it and they will come…

Most of tech blogosphere agrees with that notion but we need more innovation on this topic, and beyond Calacanis’ notion that social bookmarkers should be paid.