Timely reality check
While the concept of a “widget” might seem trivial to many outside of Silicon Valley, the ability to automatically embed a rich flash application inside another site is very powerful. It has become a new vehicle for massively gaining viral distribution. One well-known example is Youtube, as their growth was significantly driven by Myspace -- with Myspace quickly becoming Youtube’s largest source of traffic.
And this new opportunity has not gone unnoticed by the VC community. I'd estimate that over $250 million dollars has been invested in widget companies during the last 18 months.