A continuous flurry of interesting articles on the divergence between company valuations and real money making performance in the social media arena.  I obviously follow this closely as CEO of a leading white-label social media company. 

The Financial Times kicked off this week's discussion with a story entitled, "Web 2.0 fails to produce cash".  Leading venture investors predict a shake-out , but many reserve judgement saying Silicon Valley is usually right and usually early.

Bernard Lunn over at Read/WriteWeb goes into more detail about proposed business models.  His interesting analysis of a walled garden model vs. a utility model gives many consumer facing social media sites and apps creators much to consider.

Being in the social media "infrastructure" or tools business, ThePort has a clearly defined business model that should produce significant cash, recurring revenues, "SaaS" margins and significant room for product innovation.  But a model like this doesn't have the same sex appeal to venture investors as some free models including Automattic, the parent of the free, open source blog publishing system Word Press which has gained huge market share, Ning, the free, self-service social networking platform which too has strong market share and consumer-facing social networking sites.  Now Word Press and Ning may very well be able to convert their millions of users into sustainable revenue streams and walled garden social networking sites may drive extremely high CPM rates at some point off of a large traffic base, but these are interesting home-run bets.  ThePort's business model is more conservative I guess, but very attractive especially at scale.

I plan to write more on this subject in the weeks' ahead and articulate some of the significant opportunities that we see.