You can serve insane amounts of users on a single $200 a month server from Softlayer (or EC2). It's not uncommon for many types of businesses (that charge real money) to do $250k-$1m in revenue a year per server as powerful as that.
Some types of free services that go out of their way to build traffic at the expense of revenue, or computation intensive services like real time audio/video may be exceptions to that rule.
Some anecdotal evidence - I ran a cacheless Django site that more than made the server costs back monthly via a single Adsense unit, in the gaming sector where eCPMs are rubbish, and the files you serve are huge, and the server was never at any point at more than 20% utilisation.
By and large, the cloud has lowered the barriers to entry. Unless you're running Justin.tv, server costs are down in the noise. Getting users is the hard part; serving them pages is not.
Some types of free services that go out of their way to build traffic at the expense of revenue, or computation intensive services like real time audio/video may be exceptions to that rule.
Some anecdotal evidence - I ran a cacheless Django site that more than made the server costs back monthly via a single Adsense unit, in the gaming sector where eCPMs are rubbish, and the files you serve are huge, and the server was never at any point at more than 20% utilisation.
By and large, the cloud has lowered the barriers to entry. Unless you're running Justin.tv, server costs are down in the noise. Getting users is the hard part; serving them pages is not.