Websites seek to transform audiences into profit

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: In the aftermath of the dot-com bust, many chastened venture capitalists pledged never again to finance an idea scribbled on a cocktail napkin with no viable business model. Too many poorly conceived companies like Pets.com and Webvan had flamed out. The new breed of Internet start-ups needed to have a clear path to profitability.

The discipline did not last. Successes like YouTube, the online video site sold to Google for $1.65 billion in 2006, convinced some venture investors that building a website with a large number of users could still be more valuable than making money from paying customers. Now, as the global economy enters a severe downturn, the relative merits of these two philosophies will be tested again.

The two poles of the debate are apparent in the world of microblogging, where people use the Web or their cell phones to blast short updates on their activities to a group of virtual followers.

Twitter, a start-up company in San Francisco that has become a household name, is the leading microblogging outfit. At least 3 million people have tried its free service, according to TwitDir, a directory service. But Twitter has absolutely no revenue—not even ads.

Yammer, a new and much smaller copycat aimed at corporate customers, has a mere 60,000 users. Unlike Twitter, its founders set out from the beginning to charge for its service. Just six weeks after its public debut, Yammer is already bringing in a modest amount of cash.

Twitter has drawn much attention in the tech world since the service began in 2006. When a user is logged in through the Web or a cell phone, it asks one simple question, “What are you doing?” Users answer in 140 characters or less. While some of these “tweets” have the profundity of haiku, most are mundane, like “Sure is pretty out tonight” or “My eyes itch. I am very aggravated.”

Yammer tweaks the question, asking, “What are you working on?” The goal, said its chief executive, David Sacks, is to make offices more productive. People on Yammer update colleagues on company events or ask work-related questions without clogging e-mail boxes.