Many of them don't turn a profit, and many of them have no viable monetization strategy at all.
Instead, they rely on venture capital.
The VCs look at the traffic and engagement numbers and figure there must be some money to be made there (somehow) and they want to be in on the ground floor. Unfortunately, the VCs are liable to lose a good chunk of that money unless they and the other website owners eventually come up with a good monetization strategy.
Diane Aull - NineYards.com
: Helping Businesses Do Business Online
Whether you think you can, or that you can't, you are usually right.