Gigaom had a really interesting article called "The Online Advertising Quandry". It's worth reading, but (for the sake of brevity) he basically points out that though internet advertising revenue is growing and will continue to grow in some segments but agrees with people who refute Jason Calacanis' claim that the market will grow for the next 20 years. The most interesting point the post makes is that almost half of this advertising money is going to Google and Yahoo. The rest is split up by smaller players, like AOL and Facebook, but also Om and me. While this does not bode well for my dream of making millions from my site, more internet advertising (whether over the long term or short term) means less money invested in print advertising and hopefully more for the little guy. This thinking is fine for sites pulling in over 3M pageviews a month, but for smaller sites, where a typical ad buy is a few thousand or even a few hundred dollars, things are not going to be changing drastically any time soon. Small sites have to rely on two things: networks and endemic advertising. These huge insertion orders being pulled away from print are not going to have a tremendous effect on sites that don't have heavy traffic, a big name, or a dedicated sales team. The secret for smaller players is optimizing Google's Adsense, moving to better networks when they become available, and selling advertising when they can. Because they don't have a dedicated sales force and because of how little profit the alternatives bring in a small site can undercut the big site's prices and still make more money than they otherwise would. [This is something this blog will be talking about more in the future.] The most interesting player here are all those startups we read about on TechCrunch. These sites are getting massive amounts of funding and have investors that are expecting to get lots of money back from their investments. A lot of these sites are either planning to sell advertising or are going to us advertising to monetize their traffic as a fallback plan and this is no easy way to recoup considerable amounts of money over the short term. Many are hoping to be purchased by a big player, but when those plans falls through they are going to be left with not enough traffic to pay back the investors or to pay for all those people they hired. Just some food for thought I guess...