1. Now reality is reasserting itself once more, with familiar results.
2. The number of companies that can be sustained by revenues from Internet advertising turns out to be much smaller than many people thought, and Silicon Valley seems to be entering another “nuclear winter” .
3. Internet companies are again laying people off, scaling back, shutting down, trying to sell themselves to deep-pocketed industry giants, or talking of charging for their content or services.
4. Some Web 2.0 darlings (MySpace, YouTube) managed to find buyers before the bubble burst, thus passing the problem of finding a profitable business model to someone else (News Corporation and Google, respectively).
5. But quite how Facebook or Twitter will be able to make enough money to keep the lights on for their millions of users remains unclear.
6. Facebook has had several stabs at a solution, most recently with a scheme called Facebook Connect. Twitter’s founders had planned to forget about revenues until 2010, but the site now seems to be preparing for the inclusion of advertising.