formspring.me
How do Web 2.0 platforms like formspring make money?
Mostly they don’t make money. Keep in mind that even Facebook didn’t turn cashflow-positive until last year and they have their own full-blown advertising platform running and a couple of hundred million users.
Most Web 2.0 startups keep themselves afloat with money from the founders, angel investors or VCs (or some combination of these). The idea is that once they achieve a certain scale, a viable ongoing commercial model will emerge. Or they plan to sell the business to someone else and let the new owners figure out the commercial model.
Some of them no doubt have a pretty clear idea what their commercial model will be right now but haven’t reached the scale needed to make it work yet. No doubt the smart guys & girls at Tumblr have a better long-term plan for making money than selling t-shirts.
