Both companies have potential valuation issues, however.

Facebook already has ads, though, and they're evolving a business plan constantly. Twitter has nothing. So they have less experience with raising money and they've got more to lose.

I've clicked on those ads that they have now already. And since they were interesting things, I'm likely to keep an eye on that area for the foreseeable future, to see if anything else neat crops up.

Seems like an excellent way to roll-out ads... first, make the users look at the area where you'll place the ads, by putting interesting stuff there, and then put paid ads there.

So long as most ads remain relatively interesting/targeted, I'll keep looking. And probably clicking, too.

Consider also that Twitter users are very used to clicking on external links, because we do it all the time for links tweeted by others. I am much less likely to click on an external link in FB than on Twitter.

Facebook has some excellent targeting. I've gone to a few Facebook links and if I wasn't broke I'd have bought some products, too. (Right now they insist on showing me the Twilight DVD, though, which irritates me.)

http://www.itworld.com/business/64445/twitter-house-ads-appe...

HN has a lot of prime homepage real estate to the right, but if they put a link there to the submission form, it's hardly an ad :)

The standard way is to place ads and juggle them about until you've figured out where they attract the more clicks. Twitter's way appears to first manufacture a high-interest area (by putting cool twitter stuff there), then, once people are used to seeing nifty stuff there, start selling that nifty space to others.

Is the same true about FaceBook?

Twitter has 20 employees, a cash burn rate of $5m a year according to the article.

Facebook has hundreds of employees and servers... probably a lot harder to make a profit.

my personal opinion is that facebook users on the whole are a lot more engaged than twitter users. i know an awful lot of folks on twitter who use it as a broadcast medium rather than a place for conversation and connection. facebook seems to be a place where people actually connect with each other more. granted, this is all anecdotal.

IIRC, that was supposed to be our lesson from the dot.com bubble :) The early hype about "Web 2.0" was that this time around we're doing it for cheap and with a revenue model...

The "Web 2.0" mindset, at least the mindset I've seen most often on HN, is build it fast and get it out there to see if it has value. I also think there is some thought to how the solution can be monetized, but plans change in response to changing environments.

Current technology does make this valid in some sense - you can launch very cheaply and, if you attract enough interest, get bought by a larger company. As I understand this is YC's general approach. But it seems that Twitter tends to refuse buyout offers, so I they are more of a classic dot.com.

Sadly, this is not the Web 2.0 mindset. If it was things like Twitter and Facebook would have been "monetized" a few months after their launch, when it was abundantly clear that they offered value to people.