Old saying: those who don’t remember history are doomed to repeat it.

Aside from the value that old axiom has with keeping young children in line and in school, it carries a business change lesson, too, and I’ll phrase it as another old saw: if you put lipstick on a pig, it’s still a pig.

Henry Blodget is one of new media’s superstars, and with his business pedigree he has the right to boast. But Henry’s made a mistake this morning in looking at the words of Bo Peabody and laying them out as an example of business sense. And Henry had better be wrong, because his own business will fail otherwise.

Peabody made a large fortune selling early social networking company Tripod to early search engine Lycos in 1998 and has been a venture capitalist since then. And he’s arguing that Facebook and Twitter are doomed to failure. I really do want to agree, but here’s why that’s wrong:

Many earlier Internet properties were never monetized. That includes Tripod, and it includes Lycos and the many other search engines that you’ve likely never heard of. Facebook is making serious advertising revenue. Twitter is . . . going to.

Bringing up the other side of this: advertising revenue isn’t enough.

That argument falls flat when there’s ENOUGH ad money. Sure it’s harder to survive on just advertising revenue in the narrowcasting era (just ask the big television networks), but Facebook and Twitter are about as broad as you can reasonably ask for. Remember the Kim Kardashian / Super Bowl / Paid Twitter story? Look at the numbers again.

Remember that Google was nothing but an advertising company for years, and the other things they are adding that create revenue are just now happening. If Facebook and/or Twitter and/or whomever can get big enough and generate enough ad revenue, there’s no reason to consign them to the same junk heap as Mr. Peabody’s examples.

Today’s Business Change Lesson is this: you will repeat history if put lipstick on your pig. And both Facebook and Twitter could still turn out to be examples of exactly that. But if you see new ways to do business and carry them out, business change will make for real success.

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