She’s skeptical about advertising-supported social networking sites, and wrote a multipart essay last year walking through the problems with it (the essay was originally posted to her Live Journal account, but has been moved to Dreamwidth.)
The primary problem she argues, is diminishing returns on ads, resulting in lower prices, and lower prices requiring replacing more editorial content on the page with ads. The reason why there’s a diminishing return for ads on a social networking site: people come there to communicate, not shop. Unless you have the capability (like Facebook) to place a narrowly targeted ad with a high likelihood of getting some sort of conversion into sales or action, then trying to fund your site through ads will not succeed.
That skepticism, and Live Journal’s switch to an advertising-supported model, spurred her to take a branch of the open source Live Journal code, and start Dreamwidth.
Dreamwidth supports itself through a paid accounts system. Users pay as little as USD5 a month up to USD50 a year.
Disclaimer: I am a charter subscriber to Dreamwidth with a lifetime account. If you’d like to try it, please comment on this post. I have a small number of free invite accounts I can share.