Re:Facebook and Twitter Don’t Know What You Want
by AznHisoka on Saturday August 18, 2012 @03:18PM
(#4402005)
I think if FB and Twitter fail (compared to their expectations), that would be a good thing for the startup world. Right now we see a lot of consumer startups whose sole business model is online advertising - it doesn't matter if it's Adsense, display ads, sponsored tweets, what have you - it's the same thing. Online advertising. And even if you're optimistic, if you do the math, you realize one thing: it's not sustainable.
If there's 1 thing I like about App.net, it's that we're starting to see a shift from relying on ads as revenue to building a product users will PAY for, whether it's B2C or B2B. In a sense, relying on online ads is a semi-copyout. It's like you're throwing your hands up on the air, and saying "I got NO clue how to provide a service people will pay for here, I'll let YOU advertisers do that instead for a fee!".
Most people are just naive and see FB making billions on ads and think they can build a startup around advertising as well. The harsh reality is that only a few hundred companies can rely on advertising, and even most of them are having troubles these days, with the incredible high cost of creating high quality content, diminishing advertising rates, and avoiding Google penalties that happen every other week. The ROI is just not there.
If there's 1 thing I like about App.net, it's that we're starting to see a shift from relying on ads as revenue to building a product users will PAY for, whether it's B2C or B2B. In a sense, relying on online ads is a semi-copyout. It's like you're throwing your hands up on the air, and saying "I got NO clue how to provide a service people will pay for here, I'll let YOU advertisers do that instead for a fee!".
Most people are just naive and see FB making billions on ads and think they can build a startup around advertising as well. The harsh reality is that only a few hundred companies can rely on advertising, and even most of them are having troubles these days, with the incredible high cost of creating high quality content, diminishing advertising rates, and avoiding Google penalties that happen every other week. The ROI is just not there.