CEO of Strategic News Service, an online newsletter that predicts the success of communications companies, Mark Anderson was recently quoted in the Telegraph to say that websites offering free products in exchange for targeting users with advertising will fail at a 9:1 ratio.
He continued to say that the tolerance for intrusion and capitalization of personal information for advertising has gone down. Anderson stated in an interview on BBC World Service to “Note the very humble pie apology from the founder of Facebook – terrified that in fact he might lose his entire franchise because he made a mistake with a new advertising product called Beacon.”
Although one of the latest trends in online advertising is investing in social networks, Anderson thinks that “There are more names than money so far. There are many more Web2.0 companies out there than will ever survive. We’ll see a lot of those companies failing this year.” The failure is coming from the reliance on advertising and a universal acceptance of it. There is a tipping point to everything, and for Web2.0 firms the time just may have come for theirs.