Randy Komisar of KP said this at a Venture Beat Interview

I’m personally not doing much in Web 2.0 at the moment. I’m looking for more fundamental innovations. I’m less interested in the content and media fallout. There are no strong barriers to entry in Web 2.0. If by Web 2.0, you mean companies that build an audience to be monetized by Google, I am not actively pursuing them; though I should never say never.

I’m not sure how long YouTube would have remained an independent business had they not been bought by Google. Google has an efficient search engine to monetize large audiences. If you’re creating Web 2.0 products and media, its tough to build anything of sufficient scale to remain independent — you are more likely to end up being a feature on Google, Microsoft or Yahoo…

I couldnt agree more . . . and you can gleam lots into what type of internet companies KP wants to invest in

1. Companies that does not rely on search engines for more then 20% of its traffic in the long run. Otherwise you are just asking google to come and eat away at your margins through adword (notice I mean organic and paid traffic). . . (translation, B2C e-commerce is a tough place to play unless you have the secret sauce)

2. Companies that does not rely on an “ad network” (read adsense) to monetize its traffic (even if its completely type-in, self generated). This could mean that the company can achieve enough scale to build its own ad network or ad sales force. BUT more likely it means the company has figured out a way to make money outside of begging user to click on ads.

In short, stay away from Google, beat it where it aint (and there are many places it aint). Ofcourse, I’m not sure staying away from the INTERNET completely is a good idea :)

hat tips to VC Ratings