Here come the venture capitalists (look out!)

MediaDailyNews reports today that venture capitalists (VCs) are once again smiling on advertising as a revenue model for Internet businesses. These are the guys who fueled the original Internet bubble by foolishly tossing millions of dollars at entrepreneurs who pitched advertising as THE way to make money on the Web. In the end, though, the only people who believed the model were other Internet companies, who were busy spending their investor money on, well, Internet advertising. The difference today is that Madison Avenue is doing the buying these days, something the VCs had hoped would happen five years ago.

Mark Stevens, a partner at the law firm Fenwick & West, said he couldn’t agree more with Larry Marcus, general partner of venture capital firm WaldenVC, “about the power of the advertising model.”

“It feels a little like it’s 1998 again,” Stevens said. Both Stevens and Marcus agreed that ad-supported media content providers once again have a compelling business model now that the ad market has matured and stabilized.

Stevens noted this success comes at the expense of older ad-driven media like newspapers–an industry that “doesn’t even know its business model is dead,” he said.

Frankly, I hope it never “feels” like 1998 again. That unbridled zeal swallowed up a lot of people, myself included. Who needs VCs anyway?

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