The financial markets continue to spiral downward  and the tech sector is feeling the after shock. MySpace maybe just one of a few victims that will fall. We are going to lose some good companies.” That’s the warning cry from investors in tech these days.

The problem is that being loved is no guarantee for success. Even being used isn’t enough.

MySpace is limping along barely. Although it’s generating a lot of revenue, and under Rupert Murdoch, the notoriously ruthless businessman could easily cut loose this social network of yesterday. The momentum is certainly not with this one.

Twitter has yet to turn on a revenue model. It’s not like the company would lose users, if it set up a minor advertising strategy as a test; people want to see the company make some money. I am not a Twitter fan, so this one would not matter to me.

Ask why isn’t it dead yet? It’s really a good search engine, and even a small piece of the search economy can generate significant revenues. But running fourth place in a three-horse race is not a good position to be in when the costs of competing are high, as they are in the search market.

To read more about troubled web companies go here.