[solost]

I believe that the simple answer you are looking for is scalability. For many businesses, especially online business, to be successful they need to be able to reach beyond their local communities for customers.

All of the companies you mentioned that generate their revenue from advertising and many others have reached a critical mass in their audience size. This allows them to be a viable channel for a wide variety of vertical markets and or an extremely targeted option in a limited set of vertical markets. This is the reason advertising can dwarf manufacturing. Advertising can touch multiple verticals and have multiple customers spending dollars to compete for the same customer.

The real challenge for those companies that generate their revenue from advertising is the ability to identify audience interest and intent. Advertising companies that do well in generating revenue from advertisers are generally able to identify their audience’s interest and intent when it comes to products and services thus providing their advertisers with the best possible marketing opportunities.