Classifications of commercial websites

Web 1.0:
Sites = News/Articles/Entertainment
Advertising = Banners.

Web 2.0
BUSINESS
Sites which advertisers like because they have a perceived or actual value.
Search Engine, Internet yellow page site, Directory, Lead gen-site, Classifieds

CONSUMER
I've created a site which people like to use:
Email, Social Network, Online Game

Note that there is not a 3rd option: Mixed.
Only the top, well executed sites can pull off being both a consumer and business oriented site (ala Google, Craigslist). You cannot be "a social site that combines users and advertisers in a unique way..." as so many business plans these days content.

Sites which try to be Business and Consumer oriented generally fail at doing either effectively. History has shown, if you can build the users, advertising revenue will come. Pick your audience, love them and stick with them. Once you turn around and start pushing your users off to other sites (via ad feeds and sponsored links), it will lessen your value to users. Afterall, if the purpose of your consumer site to keep users satisfied on your site? If a sponsored ad is more engaging than your content, you've got a loosing strategy long-term.

Self Generated Content Threatens Traditional Media

Those familiar with internet publishing are well aware of the power of user generated content. Media and entertainment executives are now recognizing that the ability and eagerness of proprietors and individual users to create their own content as one of the biggest threats to their business. According to a new survey by Accenture, 57% of the respondents identified the rapid growth of user-generated content as one of the top three challenges they face today. And, 70% of respondents said they believe that social media, one of the largest segments of user-generated content, will continue to grow. The content comes from custom web sites, wikis, social-media blogs, amateur digital videos, podcasts, mobile phone photography and wikis.

According to the study:

• 68% of the respondents said they believe that within three years their businesses will be making money on user-generated content
• 62% said they believe their companies will make money through advertising and sponsorships of social media
• 21% anticipate improved profits from subscriptions
• 18% expect profits from pay-per-play offerings
• 24% of respondents said they do not yet know how their businesses will profit from user-generated content.

End-users prefer to consume content that is organically originated from other users. Economic usage patterns show a purchase preference for this information as opposed to the traditional media.

Why is this happening:

Internet destinations are rapidly expanding and this includes custom websites, social networks and directories. Search engines, such as Google and Yahoo do a fantastic job of identifying the pertinent information. just about anyone with a valuable and distinctive message can have their content found online.

Getting Business Owners Online:

This study is further evidence that proprietors and individuals need to take control of their public marketing. Businesses can take that information directly to consumers, bypassing the media giants completely. Businesses are recommended to utilizing a variety of websites such as Yahoo Local, Craigslist, SuperPages, Google, Yelp, business directories and a business profile page to regularly publish information such as to company information, current events and special offers and promote coupons.

(source: IQ Reports)