Business in Virtual Worlds

The Web Should be Free, but Will it Stay That Way? … and Google Gets Burned

Greg Verdino has thrown a thought-piece that addresses the issue of what happens when dynamic and exciting – but most importantly free – Web platforms (Facebook, Twitter,, etc.) start needing cold, hard, cash.

Verdino offers up two options that seem fairly accurate. One is that the “users pay with their money,” and the other is that “the users pay with their attention.”

The intention of his post is to engage a discussion through the comments section of this blog entry. So, we scanned the comments and found that, in general, the commenters:

- Would not mind ads at all on most of these sites, as most said they would ignore them/not click on them anynow;

- Or ask the users for money, perhaps on a sliding scale (one commenter called this move “ballsy”)

From an editorial perspective, it’s interesting to see the move towards an ad-supported world of Web publishing (as opposed to subscription-based, which it was in the past with print publications, which then moved into a combination subscription/advertiser-supported model.) The advertisers may continue to strengthen their position the more people rely on them – thus making it harder and harder to report on said advertisers.

But even Google seems to be having trouble making money off of all that free social media, with Wired reporting that it got “burned” by its MySpace deal:

“I don’t think we have the killer, best way to advertise and monetize the social networks yet,” said Google co-founder Sergey Brin, on a conference call in January. “Some of the things we worked on in fourth-quarter didn’t really pan out and there were some disappointments there.”

The alternative to “monetizing social networks” is, according to Andy Monfried, founder of Lotame:

“You can’t put up contextual ads against user-generated content,” Monfried says. “It’s irrelevant, and advertisers don’t want to risk their brands on user-generated content.”

In some ways, this speaks exactly to the point I was making yesterday in the far-ranging discussion with Giff of the Electric Sheep Company: in a world in which there is increasing self-expression, how do brands become a part of the expressive domain rather than unwanted interlopers? Tightening controls and making clients lighter, curating experiences, and integrating campaigns across platforms addresses the anxiety of advertisers about pull rates and brand equity, but it doesn’t necessarily address the deeper need to understand how companies might need to play and think different in a world in which there are fewer controls and more user-generated expression.


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