An alternative to advertising for web 2.0
posted by shuri on 2008-06-06 05:59:01
tags: news,business,models

Mashable has a nice article on alternatives sources of revenue for web companies. First of you've got to clarify what's wrong with the current ad based model?

What worries me about ads is their reliability. The article suggests donations instead. I think a more reliable sources of revenue would be good for companies since it gives you a source of income you can plan on. Personally, I like the two service level subscription model. The first level is free the second one is premium. The dating industry is big on that model. So why can't other web companies adopt that model?

It's the VC's fault really. Any web company that would start charging subscription fees would face competition from VC funded free services. Then data portability gets thrown in the mix. You end up with a business where the user can switch to another service as easy as switching to a different brand of toothpaste, only the other toothpaste is free and just as good. How can anybody build a sustainable business this way?