I also think it would be $400 per 1 million impressions, not visitors. Then we have to take into consideration any frequency capping (per visitor, per day and so forth). With the large number of impressions per visitor on social networking sites, I can see how it can add up to lots of money for a developer but not enough for venture backed companies – just like you said.

I already questioned VC-backed widget makers and this ridiculous web 2.0 hype behind them but I always felt they just wanted to be acquired by someone like Google who would then use AdSense to monetize them.

Google AdSense for widgets must be around the corner.

http://blog.lookery.com/2008/06/30/imitation-is-the-sincerest-form-of-flattery-the-bebo-ad-guarantee/

I’m speaking about Social Networks in general – and there are many out there, especially small, bootstrapped ones. I run a social network that if generated 40 cents CPM would have made me a huge salary (it was a one-man-shop). You make millions of page views pretty easily with a social network, and it’s enough if you’re bootstrapped.

The problem: It’s difficult to get advertisement on a site, especially if it’s small. If Platform A gave me the 40 cents CPM in Europe, I would have taken it. The other problem: Paying 40 cents CPM or more can make sense, but not without perfect optimization. So it makes little sense to offer that third-parties that can integrate the ads themselves.

It says…”made me wonder how in the heck anyone could make real money off such a low CPM”, yet it then says “…for those riding the Platform A gravy train.”

So which way is it – no real money or a gravy train?