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The Rise of Social, Decline of Usability
Social sites seem to be where all the growth is right now. Some define the term “Web 2.0” in terms of being able to help people connect and build knowledge together over the web.
What is strange, is that whilst everybody is running around screaming about how great Digg and Technorati and Facebook are, nobody seems to have realised the business models suck. They all seem to assume that if you have a user’s attention, you can monetize that somehow. The easiest way to do this (because it requires nothing more than inserting a code snippet into the layout of the page) is to put advertising on each page.
If you think about it, this is a terrible business model. It’s akin to building a really great bar, and instead of making money from selling drinks you interrupt everybody’s conversation every few minutes with a “message from our sponsor”, or perhaps if you’re running a CPM campaign as opposed to CPC, perhaps don’t have any music on the jukebox, just play ads.
What’s more, some applications really don’t suit this model. If I’m trying to read my mail, I don’t want gmail to try and ‘help me’ by showing ‘relevant’ adverts. I’m reading mail, not thinking about how to spend money. Likewise if I’m on a business networking site, I’m probably there looking for people who might be potential clients – nobody joins a site in the hope of spending money – and if you keep interrupting me, you’re a lousy site.
However, other business models cause problems if your aim is to build a social software application. If the purpose of the site is to get as many people as involved as possible, you can’t charge an entry fee and not lose out in terms of software function.
I keep on thinking through different ways of handling this. I think Wikipedia has a great approach – don’t run ads, beg for money when it’s needed, syndicate content to people who will run ads, keep costs low. But it only works because there are thousands of people who are passionate about the site itself, and because they all accept that ads on the main site would sully the purpose and cheapen the experience for everybody.
However, one day, their model will break. And eventually they’ll have to make a choice: charge for access, put ads next to content. It doesn’t matter which solution they choose, they’ll end up sacrficing something about what makes the site useable and worthy of their current praise.
To be honest, I’m not sure what the answer is to this, other than point out that at the moment we have just two revenue models, and they’re not enough: we need to build out more for the next set of social software to be a success.
