Every time I see a website offering awesome service to millions of users I wonder what their revenue model is. I have been surprised (at least initially) after seeing Google, Facebook, Twitter, Stackoverflow and also Quora. It takes an amazing amount of engineering and money to scale to that large a user base. Every amateur when sees these free services for the first time would wonder - really this is for free. After having seen a bunch of these sites one becomes used to the reality that if the site succeeds then they will figure out a way to make money. Websites typically use a combination of advertisements and premium services offerings to make money.
While advertisements are a common way of making money it cannot be sufficient. I am not an economist but I feel so because every company will invest only a fixed amount in advertisements. If more and more awesome websites start making revenue out of advertisements then the advertising revenue would be divided among all players - say Facebook, Google, Twitter, Stackoverflow. Fiercer competition will ensue on customized advertising engaging the research community to come up with state-of-the-art algorithms to target potential customers. The bottomline is that among competition, customer spending limitations and advertisement revenues upper limits, it is likely that advertisements alone are not sufficient. An economist may give counter arguments and I would be glad to hear those opinions as well.
That said it is imperative for companies to build up premium services to build up an alternate source of revenue. Google has Apps for enterprises, paid storage and I guess some form of enterprise search and many more things will follow. Twitter has started to offer promoted tweets but that is a way of marketing products and businesses - again advertising based revenue. Stackoverflow has StackApps which could be used to build revenue - I am not sure if it already is making non-advertising revenue directly. Facebook must be having plans for enterprise social networks much like Salesforce's Chatter.
A new possibility exists with the way twitter is being used - building up Private Tweet Channels much like Stackoverflow allows QA sites focused on a particular topic. Very often twitter is used by businesses as a medium to ask live questions over the live chat shows, live tweets are streamed on TV channels. This video gives a feel of the use case.
Twitter can really work out premium services for voting campaigns initiated by television channels. Private Tweet Channels to use within an enterprise or amazing analytics for tweets could easily work out as a saleable service. This is more so the case because of the already established popularity of Twitter. Also TV channels would be willing to pay twitter an extra amount only if irresistible features are offered in the premium pack.
Googling for Private Tweet Channels I came across the following video. It seems like a hack to support private tweet groups on twitter or to better phrase it Jugaad.
While advertisements are a common way of making money it cannot be sufficient. I am not an economist but I feel so because every company will invest only a fixed amount in advertisements. If more and more awesome websites start making revenue out of advertisements then the advertising revenue would be divided among all players - say Facebook, Google, Twitter, Stackoverflow. Fiercer competition will ensue on customized advertising engaging the research community to come up with state-of-the-art algorithms to target potential customers. The bottomline is that among competition, customer spending limitations and advertisement revenues upper limits, it is likely that advertisements alone are not sufficient. An economist may give counter arguments and I would be glad to hear those opinions as well.
That said it is imperative for companies to build up premium services to build up an alternate source of revenue. Google has Apps for enterprises, paid storage and I guess some form of enterprise search and many more things will follow. Twitter has started to offer promoted tweets but that is a way of marketing products and businesses - again advertising based revenue. Stackoverflow has StackApps which could be used to build revenue - I am not sure if it already is making non-advertising revenue directly. Facebook must be having plans for enterprise social networks much like Salesforce's Chatter.
A new possibility exists with the way twitter is being used - building up Private Tweet Channels much like Stackoverflow allows QA sites focused on a particular topic. Very often twitter is used by businesses as a medium to ask live questions over the live chat shows, live tweets are streamed on TV channels. This video gives a feel of the use case.
Twitter can really work out premium services for voting campaigns initiated by television channels. Private Tweet Channels to use within an enterprise or amazing analytics for tweets could easily work out as a saleable service. This is more so the case because of the already established popularity of Twitter. Also TV channels would be willing to pay twitter an extra amount only if irresistible features are offered in the premium pack.
Googling for Private Tweet Channels I came across the following video. It seems like a hack to support private tweet groups on twitter or to better phrase it Jugaad.
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