Distributing widgets isn't hard, but monetizing them is proving to be a big challenge.

"The fascinating thing about widgets is it turns out that distribution isn't really the challenge. People have been tremendously successful in aggregating attention," VideoEgg CEO Matt Sanchez told BusinessWeek. "The question is how do you monetize that attention?"

According to Sanchez, VideoEgg, a widget ad network, has managed to generate about $1.5 million in revenue for the more than 150 applications it represents. But that's a meager sum when one considers the popularity of applications like Scrabulous and Vampires -- two of VideoEgg's more popular widgets.

While Sanchez is confident that advertising will help turn the hype surrounding some of these applications into real money, advertisers aren't all that keen on one of the web's more popular widget launch pads -- Facebook. Like the widgets that litter the site, Facebook has seen an amazing burst of popularity, but so far it hasn't impressed very many big brands or their agencies in its bid to become an advertising platform.