Will this glut evolve into the classic situation of too much choice: When we have 12 to choose from versus three we might become overwhelmed and just back off from choosing any. In The New York Times David Carr floats the "b" word - that is, bubble. Here is that article (sub. req.)
If it is a bubble, then that could burst for some players sooner than later. That's because it's difficult to generate revenue for news websites. Last Tuesday, in its "Marketplace" section, The Wall Street Journal had an article presenting the financial facts beneath the heady headlines and media personalities associated with the websites. In the analysis, William Launder explains that the money usually can't come from high traffic and ads. To be a profit-maker the organization will probably sell subscriptions to products, such as niche newsletters, related to the brand and sponsor conferences. Here is that article (sub. req.)
Patch, the hyperlocal news site of AOL, is in free fall. This week it laid off hundreds of journalists. Therefore, not only executives and investors have to worry if the news website will be a revenue-producer. Also content-providers have to wary about how long that assignment will last.
On the other hand, this medium may prove out to have as long and profitable a shelf life as has television. The majority of ad spend is still invested in television.