So says an article in the NYTimes this morning which summarizes the jaundiced view that VCs now have towards anyone who comes in with a biz model that depends on online ad revenue. This realization was a long time coming. The problem with the notion that “ad revenues” solve all biz model problems is that the supply of web space is highly elastic and eyeballs appear a bit fickle. And then there’s the problem that social networking sites have found—consumers don’t always welcome, and respond to ads, just because the site is free.

All that said, some of the pessimism is just a sign of the times. The economy really sucks, ad spending is down, and it probably isn’t going to get better soon. Would you be smart to invest in a Google or even a Facebook if it came along now? Absolutely, so long as you have a long view—five or maybe 10 years depending upon how quickly things improve.