Although I have no idea if it's even classed as a 'startup'.

I wonder if some of the reason for the recent backlash against advertising supported models is that some techie types install adblock, and perhaps assume everyone does? In my measurements only 6% had adblock installed, and that's for a very techie early adopter crowd.

The truth is, there are millions of websites out there, making millions from advertising. It's so much more scalable than charging users.

If facebook+digg etc cut back spending, they'd be making millions in profit from advertising. I expect they have bigger plans though.