Is The Widget Gold Rush Over?

February 7th, 2008 | Categories: acquisitions, blogs, launch, marketing, networks, social media, strategy, trends, widgets

In my mind, widgets have never been a business model. They are a marketing tool that provide exposure and funnel traffic back to a parent property. This is where a business model and subsequent monetization emerge. I think that companies (and VCs) are starting to realize this, and widget fever is nearing an end.

For clarification purposes, I believe widgets will be around forever. However, pure-play widget start-ups won’t be. The funding of these initiatives will die off as potential investors realize the risks.

Up until recently, it seemed like everyone and their dog was launching a widget-based start-up or a web 2.0 company that served up widgets. The hope was that these widgets would spur viral distribution, creating widespread exposure. In many cases, this did occur. But now what? Where is the monetization? How can revenue be generated via these eyeballs? Most held on to the hope that eyeballs would attract potential acquisitors. In other words, their revenue model was an exit strategy in disguise – the infamous “web 2.0 revenue model”.

VCs just don’t seems to be funding these start-ups like they used to – and for good measure. Without revenues, these companies are unable to sustain themselves. At this point, it becomes a time game. Will the cash run out before an acquisitor comes along? I would bet on it.

3 Comments

  1. Mikael Pittam Says:

    I don’t think so.

    The Linkin Park widget is seeing over 400,000 views daily (and the numbers are increasing). The Linkin Park widget is putting Clearspring (the widget distribution platform) on the map and boosting their business. Advertisers are scrambling to place ads on the widget.

  2. Erick Says:

    Mikael – so there’s one widget that’s popular. From that you extrapolate the conclusion that the industry is sound? In any case, if a widget with “400,000” views has advertisers scrambling, I suppose you speak of local pizza chains as advertisers. Sorry. 400k is chicken feed.

  3. Widgets: So 2007? « The Pursuit of a Life Says:

    […] Widgets: So 2007? Published February 21, 2008 Business , Web Tags: nPost, Widgets From Mapping the Web: Up until recently, it seemed like everyone and their dog was launching a widget-based start-up or a web 2.0 company that served up widgets. The hope was that these widgets would spur viral distribution, creating widespread exposure. In many cases, this did occur. But now what? Where is the monetization? How can revenue be generated via these eyeballs? Most held on to the hope that eyeballs would attract potential acquisitors. In other words, their revenue model was an exit strategy in disguise – the infamous “web 2.0 revenue model”. […]

Leave a Comment