Category Archives: monetization

valleywag and micropayments (been there done that)

Valleywag has an essay today pitching hard for a future of micropayments.  Would the madness stop.  As many, many, many folks have discussed many, many, many times micropayments are doomed to failure.  Having a lot of experience in consumer marketing online, I can confirm the theory that the biggest drop in sales is when you go from free to 1 cent.  That hit on users that imposing even a 1 cent price or tax creates has doomed every micropayment service to ever hit the startup landscape (there should be an entire section for these companies in the proverbial startup graveyard).

The good news is in all of this is that there already is a $17 billion dollar micropayments business online.  What didn’t I just say that micropayments are DOA?  Yep, but there is an alternative – advertising.  Advertising is by FAR the best solution for monetizing micropayment level transactions.  Advertising can easily cover a penny for something price.  That’s why the web 2.0 universe is free.  It’s not free – it’s just being paid for by advertisers who are more then willing to pay you way.  Is this a new model?  Nope, broadcast TV has been using the same model for 60 years.

web 2.0 expo thoughts and feedback

First I tend to agree with this blog post that for the most part I was underwhelmed with web 2.0 expo.  After the raging zeitgeist, that was the web 2.0 summit from last fall – it was probably too much to expect the show to live up to the hype in my own mind.   Now this isn’t the fault of the organizers (including pal Dave McClure) – the challenge is the web 2.0 market has moved mainstream in only a few months.  The companies that are going to make it are already making money or have enough investor’s money to figure it out, or have been acquired by a larger media copmany like Google or Yahoo!, or have already imploded and ending up on TechCrunch’s Deadpool list. 

Now there were a few companies and/or products that I thought were interesting in no particularly order:

  • Spock (disclosure – I worked with these guys for a little while this past winter) - great demo from Jay (one of the co-founders and vp of product even though Battelle gave him a promotion on stage from vp to ceo) showing how the idea of people as the object of the index of a search engine really can change a well known paradigm.  Googlng yourself will soon be replaced by Spocking yourself. 
  • Adobe’s Apollo platform – this successor to flash potentially offers all the richness and advanced functionality that Flash lacks.  However Apollo’s penetration will take years to build.  Remember Flash roled out in the mid-90′s and took almost a decade to reach ubiquity.  Whether Flash is eaten by its child Apollo or whether Flash continues to grow will be interesting to watch.  Startups like Dekoh which offer similar platform vision will have a hard time swimming against the dollars, resources and entrenched developer network that Adobe has.  Their best hope – get bought by someone who wants to go toe-to-toe with Adobe.
  • G.ho.st – cool concept and plays on the computer in the sky concept that I have been writing about this time as a literal computer in the sky.  It’s built on Amazon’s web services and I look forward to playing with it.
  • Dapper – great concept – widgetize any website or build an api for any website that doesn’t have one.  Potentially very useful service when trying to incorporate random third party services that aren’t built for it.  Not sure I understand how they’ll make money (and thus stay in business) but it looks plenty cool.

One of the areas which I thought was missing from the expo was the lack of focus on monetization.  This to me is still the elephant in the room that no one is talking about.  Unless the web 2.0 world is happy living off of $0.25 to 0.50 cpm’s, then it’s something that will need to be addressed at some point (I have my own ideas naturally).  Time will tell.