This, unfortunately, is not a new story. Boomertowne.com has gone out of business according to this news item. The founder, apparently, was just "the idea guy" and he hired an advertising agency to tell him what the marketing data forecast would/could be (!)
Of course, his plan for 118 million visitors that turned into less than a million isn't really surprising. If he - or you - set out to build a business based on forecasts, you have to find ways to test before you roll the dice on the whole plan. Those tests ought to reveal the likelihood of reaching the goal you planned.
On another topic, an idea guy who doesn't know the business is taking on a lot of risk. No one can be responsible for delivering results that the entrepreneur doesn't understand.
On the subject of the business model, a friendly critic with some real experience points out (in the article) that she was skeptical - in April - of the goal being realistic.
This is a common problem. If you back into a business model, and achieving the results you need requires hitting a herculean goal, it's probably a bad idea. I'm constantly surprised how seldom some people who are otherwise great planners back into business models. In other words, they construct their expense structure and then figure out how many customers/visitors they need to make it work. And that's what they forecast.
It's a bit like 1)forecasting a winning lottery ticket, and 2) putting a downpayment on an airplane as a result.
This was also a model based on achieving traffic that would allow the company to pay visitors $3 a day, presumably based on ad revenue. A major caveat with that is now that advertising on the web is so trackable, advertisers prune their non-performing ads/sites/adwords pretty quickly. So all those visitors had better be buying and not just looking.
This is a hard way to learn to test before fully committing. But that trick, of committing in stages and gradually reducing risk, is at the core of entrepreneurial ventures.