michael arrington posted a clip today of a bar-side chat I did with Berkeley entrepreneurs in which I stressed how we were laser focused from the beginning on finding revenue opportunities that would scale. The primary reason I pointed to is that entrepreneurs should push to control their own destinies, and being profitable was the best path.
In the video I refer to how early on we experimented with offering zwinky toolbars. Unfortunately, we offered these before trying them out for ourselves. Once we did, we found them to be a painful experience and i'm proud that even then as a 10 person startup we decided to take them down.
the lesson we learned was that while we needed to strive for early profitability, we also couldn't sacrifice user experience.
Btw, these zwinky toolbars from an IAC subsidiary are still widely offered on the web today.