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Tuesday, 10 April 2007

Web 2.0 World is a great place, but where's the Money?!

"Everything is free, just take a cookie!" is a line from the video (You can watch it below) that pretty much summarizes the Web 2.0 model. Currently what most Web 2.0 ventures are doing is collecting information and creating an audience, and in some cases, basically waiting to be acquired.
If there is a monetization model out there, most of the Web 2.0 sites and services haven't found it yet, or they just can't apply it. Anyway, here are some suggestions made by experts:

Subscriptions: some very useful services finance themselves with subscriptions, but it's certainly not the way to go for everybody. Even those services that use that model have a hard time fighting with the competition that offers the same services free of charge.

Commission: a nice way to monetize services that offer assistance to shoppers (travelers, and other buyers), but it's really not a model that applies directly to a typical Web 2.0 service. But we can use a Web 2.0 feature combined with a more or less traditional commercial model – and make success.
That is where I see a good monetizing model for the Web 2.0 – using it's main qualities as a feature.

Advertising: even though most investors and financial experts don't really like this model, I still prefer it. It allows the services to stay free, and as the video says, that is what it's all about. As we all know, on-line advertising is growing in numbers, but the Web 2.0 is giving it ways to expand, become more targeted and effective. An average social networking service knows a lot about it's users: besides the general information (name, sex, age, location…) we have an insight to their habits and preferences, favorite brands, hobbies, and relationships.

Something else: Subscriptions and Commission are mostly not applicable, Advertising might bee to intrusive… There are only so few ways to monetize, and so many reasons why we should not use them.
The Holly Grail of Web 2.0 monetization is yet to be found. Meanwhile, everything is free, just take a cookie!

2 comments:

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