Fold.com has called it a day, according to TechCrunch. The company, which developed an Ajax-powered personalized home page, apparently fell victim to intense competition, which includes Google, Yahoo, Netvibes and PageFlakes. While Fold.com is just one company in one Web 2.0 vertical, it does demonstrate that while it's simple to create a new service, establishing a viable business is a huge challenge - particularly in a market where the barriers to entry are low and new competitors can emerge on a regular basis. You can expect a slew of "we've gone out of business" announcements in the coming months as hundreds of Web 2.0 start-ups pack it after failing to get venture capital or a buy-out offer from GYM. The silver lining, however, is many of these companies will have received little or no financing so the only ones out of pocket may be the founders, their employees and friends/family. Welcome to the harsh reality of Web 2.0 - or whatever we're calling it these days.
Update: Read Write/Web has a lengthy post on the personalized home page market and its competitive dynamics.