As a business, I tend to think success has to have SOME connection with revenue/profit... Unless you want to bet your success on your ability to sell a profitless venture.
I'd say when you have customers who want to keep being customers is a pretty good measure of success. Customers are the people who pay the bills... So if you have a free service, it means advertisers who are reaching an audience they care about and getting a good return on their investment.
I find the emphasis on 'users' to be a bit too simple, and decidedly not very bubble-proof. It's probably also important to qualify who your users are and how much you know about them. 100,000 users that you have no information about aren't very valuable.
I'd say when you have customers who want to keep being customers is a pretty good measure of success. Customers are the people who pay the bills... So if you have a free service, it means advertisers who are reaching an audience they care about and getting a good return on their investment.
I find the emphasis on 'users' to be a bit too simple, and decidedly not very bubble-proof. It's probably also important to qualify who your users are and how much you know about them. 100,000 users that you have no information about aren't very valuable.