Predicting the Next Web Failures

Why Rafe Needleman Thinks Twitter, Pandora and Skype's Futures Look Dim

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Are you a regular user of Twitter? Pandora? Skype? Have you thought about the possibility these companies might not be around in a year? -- a victim of the first bust. Who will be a victim of the current economic crisis? -- a victim of the first bust. Who will be a victim of the current economic crisis?

That's Rafe Needleman's suggestion in a story about who might become the next Kozmo.

He writes: "The problem is that being loved is no guarantee for success. Even being used isn't enough." He explains that a company has to have a real business model and too few of these much-loved web services have a solid-enough model to stand on their own. Some, such as Meebo, would tuck into a company like Facebook, but have such an expensive valuation that finding a buyer isn't a viable exit.

As one media company M&A exec told me today for a story that's running in Ad Age on Monday: "Even though a lot of these folks were around in the first bubble, they didn't learn their lesson. Venture capitalists emphasized traffic growth and audience acquisition above revenue generation. Now you've got a lot of companies out there that hadn't given any thought to selling ads or having subscription models. They're looking at series Bs and the VCs have gone away and there's no credit, and they have no mechanisms in place to make money."

What do you think? Whose future looks dim? Whose looks bright? What properties will advertisers cut from media plans when ad budgets shrink? What will remain the must-buys?
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