web2.0 monetization

Most web2.0 companies struggle with issues of monetization. As I see it, you’ve got about 5 options:

  1. Sell attention (aka advertising)
  2. Sell relationships (aka partnerships)
  3. Sell content (aka syndication)
  4. Sell services (aka charge for access)
  5. Sell products (aka old-skewl)

Selling attention requires scale – big scale, because attention is so ephemeral these days people don’t pay much for it. Example: MySpace, Digg, Google.

Selling relationships requires relevance – tight connection to the partnering company. It also helps if the relationship with your clients is a deep one – clients are more likely to follow up on establish a relationship with your partner company if they already have a really good relationship with you. Example: Flickr and Moo (yummy awesome business personal cards).

Selling content requires scale too, but also quality. And, unfortunately, a sales force, which means overhead. Example: BlogBurst.

Selling services requires infrastructure … real value that people can be convinced to pay for, and the demonstrated ability to deliver on them. Example: 37Signals.

Selling products requires meatspace infrastructure. Yuck. Much better to revert to selling relationships and outsourcing the production and transportation of atoms.

[tags] web2.0, monetization, startup, venture, john koetsier [/tags]

 


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4 CommentsLeave a comment

  • John,

    I would consider them one of the only true “web 2.0” companies, for the simple fact that they have a real service-based business model (not unlike 37Signals). I like how some of these companies are taking old concepts and innovating them or finding really niche markets and making them real profitable (Etsy = crafts). I’m surprised that nobody has tried to tackle Craigslist — it seems people are quick to use the “aggregator” style of listings, but 90% of the population doesn’t know what RSS (or aggregation) is.