There has been a lot of debate lately among Web entrepreneurs about online ads. As growth in online ad spending shrinks, ad-based start-ups are searching for new revenue streams and Twitter is explaining why it does not run ads.
Glenn Kelman, chief executive of Redfin, an online real estate brokerage, contends that Web start-ups that do not carry ads are forced to excel at certain things that are essential to Silicon Valley’s promise, like developing software that solves users’ problems and upending the way certain industries run.
Redfin lists homes for sale. Buyers can browse the listings and make bids online. Redfin agents help negotiate with the seller, then share the commission with the buyers. The company does not put ads on its pages in part because it competes with Realtors, its most obvious source of advertising, Mr. Kelman said.
Silicon Valley once had a “swashbuckling attitude that we were going to change every industry and make it more efficient,” he said. “Once you become more like Madison Avenue, you become acutely sensitive to what’s going to annoy your clients.”