Have I got a deal for you. I have a new killer app for the Internet. Now it happens to be in a space in which each of the last several inventors of a killer app was leapfrogged by someone just like me. Now I’m not making any money at all and I’m not really sure how I’m going to. The other ventures in my particular space haven’t set the world on fire with their ability to make money but they, like me, are hopeful. After all, we know from the Internet that if you get a lot of eyeballs and create share, the money will follow. Would you like to buy a piece of this for some serious cash?

You might think that you have just discovered a note in a bottle from a shipwrecked Internet entrepreneur circa 1998. Or that you have just woken Rip van Winkle like after a decade. But, in fact you have just more or less discovered what must have been Twitter’s power point deck to T. Rowe Price and other investors who gave them $100 million and a valuation of $1 billion.

Analysts tend to describe Twitter as a social network and suggest that it is competing with Facebook. I don’t really see that since Twitter is a broadcast technology with little social networking to it. But it does have enough similarities in its business models that we might want to think of Twitter as being an extension of the Friendster-to-Facebook evolution. People thought Friendster was killer when it came out. Then it was outshone by MySpace which of course was the killer social networking community. Until of course it wasn’t because Facebook has been growing more quickly and people act (wrongly I think) like MySpace is dead meat. And now I’ve seen several comments that Twitter is going to prevent Facebook from having a monopoly and Facebook must be saying woe is me because its entreaties to buy the new kid on the block failed. Gee, do you think it might be possible that someone could come up with a shiny new toy that’s even spiffier than Twitter in a couple of years? It sure seems that this part of the Internet space doesn’t have very serious barriers to entry. Consumers seem about as fickle with their social networking and such activity as junior high school girls. Maybe Facebook has staying power but it remains to be seen.

Then there’s the money problem. It really does seem to be déjà vu all over again with entrepreneurs grabbing eyeballs without really figuring out whether the method they’ve used to attract those eyeballs lend themselves to making money.The social networks may eventually figure this out but for now they are trying to persuade advertisers to insert themselves in places where the community really doesn’t want them to be. As my colleague Karen Webster points out, advertising on social networks is sometimes like having a salesperson join your dinner with friends, see her latest paper, The Five Forces of Social Networking. You might think that investors would want to see proof that the last umpteen sites like Twitter have some way of making money before throwing money at them.

Perhaps my negativity here results from the fact that having used Twitter now for a couple of months I don’t see the value. And I know lots of people who really get a lot of value out of Facebook but few who tell me how much they are getting out of Twitter. But in fact I think it is time to remind ourselves of what we learned from the dot.com crash and later history.

First, getting share or lots of eyeballs is no guarantee that an Internet business will ever actually make money.

Second, whether a site can make money really depends as much on how the site is designed and how it can be used to make money as it does on the number of eyeballs coming to the site.

Third, entry barriers really matter. Eyeballs can move quickly on the Internet. Unless a venture has a way to make people sticky to its site or otherwise make it difficult for someone else to come along and attract those eyeballs the venture’s business is about as secure as the hula hoop was.