Web 2.0 harder to monetize than predicted?
Adrian McDermott
April 28th, 2008
According to a Heise Online article, reporting from the first Cologne Web Content Forum, ‘Mit Inhalten ist kaum Geld zu verdienen’ i.e., the chances of earning money through web content are slim. Some of the figures they discussed were:
LinkedIn: Turnover per member per year > $US 5
Xing: pr Turnover per member per year > $US 4
FaceBook: Turnover per member per year > $US 3
YouTube: Income 2007: $US 20 M against business costs of $US 365 M!
The various reasons put forward for this included slower replacement of mainstream media services than predicted, and the sheer multiplicity of services competing for users’ attention.
In a similar vein, an OnlineBusiness-Guide blog Web 2.0: Finding a business model that pays, looks at the difficulty of getting cash out of social network apps, as many assume that numbers will mean ad revenue, even though ads do not necessarily suit each service. He, along with many other commentators, thinks that enterprise apps are the way forward, generating cash for useful social apps through licence fees.
The other way forward could be mobile apps, as Wolfe’s Den Blog in InformationWeek suggests in Web 2.0 Expo Reveals: Mobile Is The New Desktop, Social Nets The New Media Companies. That last suggestion makes a lot of sense to me intuitively, because that’s simply what I see most, and because users already pay according to the time and services used, making micropayment system probably a more straightforward possibility.
It will be interesting to see if Twitter, who are looking to raise $15M at a $60M valuation, get their money, in the light of this picture.