4 ms·

can you just explain it?

• nickpp 16y ago
  Startups made "collaboration deals" announcements with AOL then got funding based on those "perspectives". Large part of that funding would go to AOL to buy a front-page add. They say that the only limit to AOL's revenue from this was the amount of space on their website first page, not the number of interested startups. Basically the valuation of the giants stayed up for as long as easy funding was available to .com's. Their spending habits, without being backed by actual revenues, were more than enough to sustain the stock prices of the few big ones selling to startups whatever they needed (ad space, big iron or aerons). They all fell together when the crash came and easy funding dried up.
  • jacquesm 16y ago
    I don't see any such strings attached to this deal.
  • robryan 16y ago
    Expenditure is different this time round though, most of these startups aren't looking to blow heaps of investment on advertising and expensive offices and server costs are nowhere near where they were. Most startups now to know that building an audience isn't enough that they need a revenue model. Many startups being built to are good fits for acquisitions by the bigger players, generally less people getting funding for things that are unworkable. Also the public is far less adverse to sharing and purchasing online and innovations like the app stores and things like the kindle have opened up many more markets to generate revenue.