Where is the Money? Web 2.0 or Enterprise 2.0

How do we monetize Web 2.0 startups is a million dollar question that is hounding every entrepreneur and Venture capitalist. Even the mighty facebook and youtubes are struggling to monetize their huge user base. According to forrester, it looks like making money from Web 2.0 startups aimed at consumers is incredibly hard. What is more disappointing is the odds of success are one in thousand startups. Ok, maybe a little exaggerated.

Other than Google we have not seen a startup in recent years that found the gold mine. Facebook hasn’t found the gold mine; most of the other startups are still dependent on the Google Adsense ads (ning etc). We have seen tones of articles written about how to monetize twitter service, which for the most part is hugely popular with bloggers and early adopter. Still they are struggling to find that revenue generating business model. Some folks feel we are in the Web 2.0 bubble world waiting for the bubble to burst. Don’t count me as part of this crowd. I still feel there is plenty of potential in Web 2.0 startups. Google did have the same problem until they figured out the ad model. Same goes with other good startups. Some startups fizzle out in the journey, some stay put till they find the gold mine. So don’t write these startups off.

So where is the money? Enterprise 2.0 startups that are building social apps for corporate are raking in the mullah. These are the startups that are not very popular with the bloggers, but are popular among the corporate.

Here are some of startups that are making revenue (Forrester has categorized them based on the objectives)
• Listening (Communicate, BuzzMetrics,Cymfony, Umbria. MotiveQuest)
• Talking( Brains on Fire, Edelman, Avenue A/Razorfish)
• Energizing(Bazaar voice’s , Power Reviews, ExpoTV)
• Supporting(Mzinga/Prospero, Jive Software, Awareness, Lithium )
• Embracing(Salesforce Ideas, Innocentive )

Off late enterprise 2.0 startups are gaining momentum and there is a huge potential in this arena. I had earlier written about enterprise 2.0 business opportunity . The only caveat in enterprise startups are- it’s hard to get traction for big corporations.