. . . Many of the companies that are producing revenue rely on advertising, a dependence that worries Larry Chiagouris, marketing professor Pace University’s Lubin School of Business in New York.
“If you fast-forward beyond the next 24 months, people will realize that these companies just aren’t going to make a lot of money,” he says. “Advertisers are not putting a large portion of their budgets into these companies.”
Chiagouris thinks the stampede to invest in Twitter and other money-losing startups is heading in the same direction as the dot-com bubble of the late 1990s when a horde of unprofitable Internet companies were ushered on to Wall Street.
“People are chasing the dream of profits as opposed to any evidence of profits,” Chiagouris says. “And it’s a hope, it’s a wish, it’s a dream, but that’s all it is right now.”
Read the story by the Associated Press.