I am continually underwhelmed by business model creativity. I had an entreprenuer ask me not too long ago if there was any other way to monetize his business besides AdSense... I'm quite sure he didn't expect to be on the phone that long when I answered.
Yes, Virginia, there are alternatives... lots. They just require a little creativity.
Just thinking of this as ad supported chat really underestimates the power of a distributed communication service where people have a profile and a history of content generation in context.
I'm sure they'll get the implementation particulars right at some point, but think of it this way:
What if every content site had this service, and instead of walled garden chatrooms, they were all connected in a network.
Essentially, you will have built a social network on the back of the web w/o a single central location. I could be introduced to people who are chatting about the same things I am, and get recommendations based on the things they are chatting about. By indicating which things I feel strongly enough to chat about, connecting to others like me, this could create a recommended reading list for me based on the profile it creates watching by my actions. I wrote about how one could port this profile to other completely different types of services in my piece about Theirware and MyWare.
So, the profile built as the data exhaust from my 3Bubbles communications could be used to power e-commerce on other sites. 3Bubbles could be the place where I keep my offer inbox... I chat about travel, and so travel companies offer me travel deals. If you're an advertiser, imagine being able to give offers to the people who chat most about your product. There are a ton of companies trying to track who the evangelists are for consumer products companies... this would spotlight exactly who those people were and I'm sure companies would pay for access to them.
This could be really interesting... a lot more interesting than just ad supported chat.