September 11, 2009

Don’t Ignore the Long Tail

Great post by Rand Fishkin on SEOMoz.  Check it out…

SEOmoz Whiteboard Friday – Ignore the Tail at Your Peril! from Scott Willoughby on Vimeo.

SEOmoz Whiteboard Friday – Ignore the Tail at Your Peril!

* Filed by SWong at 10:01 pm under Uncategorized
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September 3, 2009

Business models?

For a long time, I’ve been perplexed by the number of businesses on the Web that have sprung up around a free or “freemium” model.  These businesses have the potential of creating huge number of users and usage but no clear way of making money.

In this excellent blog post by 37 signals, “The bar set in our industry is too low“, talks about the idea of offering for free and then “hoping and praying” the company will make money later.  People in the Web industry have touted, “success based upon future results” is not sustainable unless there is a real business model behind it.  Too many times I’ve heard at industry events: We can build a huge audience now and we’ll figure out how to make money later.

The first wave of Facebook apps grew huge audiences but saw their online advertising rates erode due to the fact there wasn’t a lot of intent or enough relevance for advertisers built into the apps being built.  The group of savvy second wave of FB app builders borrowed the model of paid virtual goods, popular in Asia, and have built very solid business models.  In the meantime first generation FB app companies such as Slide and RockYou, who have seen sky high valuations, have seen their growth stall since it became impossible to reach the lofty expectations set.

Another example, FreeConferenceCall.com offers simply to host free conference calls.  We use this service in my line of business every day.  Their website’s FAQ states in response to the question, “What’s the catch?”:  “There is no catch! There are no advertisements to listen to, no quality issues, no hidden fees, no sales pitches, no contracts, no purchases required, no privacy problems, no limitations or restrictions, and no surprises.”  I realize they have the ability to upsell more advanced services such as larger packages or voicemail systems but surely the number of people partaking in the free conference calls dwarf any paying customers.  It seems to me their loss leader has more value than their “for pay” services.

Hope and pray is not a new business model solution.

* Filed by SWong at 2:47 pm under Uncategorized
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