I have often thought about this issue and I think it has even come up on Global Geek Podcast. How are all these lovely looking “Web2.0” websites going to make money? At this present time most of these sites look great, they have minimal advertising; if any. They look a million dollars due to the sleek web design and neat Ajax applications that they are employing. Or to use what has become a social term: these sites look very “Web2.0”. But today I see that this is changing.
Shoutwire is what people would term a “Web2.0” site. It is an on-line community that works a little like Digg in that news stories are submitted by the community and are “shouted” or “liked” by the users. In this way articles get X number of “shouts” which promotes that story up the ladder. I guess that you could say it a form of voting. Users can submit comments and have discussions about the stories as well. Great idea, news that the community decides is important gets promoted and read by more visitors to the site. There is also an RSS feed that you can subscribe to for the front, page much like Digg. The site when I joined was slick, pleasing to the eye and easy to use and it was fun. Although being a new site at the time the community was small. I don’t know how big it is now but if they continue wrecking their “look” they are going to scare people off in droves.
I had not visited Shoutwire for a while and I had some time free so I decided to swing on over to their site. To say that I was appauled is an understament. Sure there were some sort of syndicated adverts along the top, making up part of the header. Fine, a lot of sites have that or something similar. But the wart on the face of beauty was an overly large, flashing, obnoxious, irritating, badly placed advert right in the middle of the submitted article pane, right at the top. Absolutely disgusting.
[Click thumbnail for bigger image] Not only does this make the once slick site look cheap; it was also probably one of the most badly placed ads I have ever seen, but yes, I noticed it. I hated it, I am not even sure that I want to go back and I most probably will not. In addition to that is the fact that the type of advert that the editors (or whoever decides this stuff) have used; just does not look like it belongs on the site. It looks like they were desperate for money so they stuck up whatever they were offered. I don’t care if this type of advertising works, if it was me making these decisions it just would not have happened. It would be like a flashy magazine like Vanity Fair placing ads that you might see in Picture Magazine (Australian soft porn magazine) in the featured story. I am not sure if they realise that is how the selection and placement of advertising comes across or not but I would be interested to find out what other people think. There is another “choice” advert along the right side of the main page but at least it is not in your face. But it is one that I would not have expected to see, it just does not fit with the “flavour” of the site.
That said I have always maintained that these flash sites that we are being spoilt with are going to change and some like Shoutwire for the worse. The services and the nice looking sites, to say nothing of the bandwidth do not come for free. Something has to give here for them to be able to continue to operate and maintain the services that they offer.
We are going to see some things happen. These sites that promote traffic are going to have to decide how they tackle the revenue problem. Decide to fall on their sword and die a dignified death. Or they advertise. The only other alternatives is to charge a subscription to be able to contribute to the site or perhaps to even enter it. They would have to be pretty confident of their product for that to occur. But I can see the advertising thing happening. But please do it with class and good taste, Shoutwire is a great example of what not to do.
One nasty trick that some companies might be considering is that of building a user base that is highly involved and somewhat reliant on what they offer, like Odeo for example, then start to charge people to use it. I am not saying that I have heard that Odeo is considering doing this but I must say that if I would suspect a site for maybe doing it, it would be Odeo. You ask why I hear. Well; what Odeo are doing is transferring heaps of data in the form of podcasts and sent odeo messages to their user base and anyone else that wants to just listen to podcasts. That aspect alone would be costing them a lot of cold hard cash. Up until this point in time I have seen no advertising, except for themselves. But then again they might get their funding from somewhere else I don’t know.
Another site that comes to mind is YouTube, again huge bandwidth, big dollars, huge active user base and to top it off they are as popular as you might be able to get. Are they loosing money? I know they were for a while but they might not be now.
I would pay for both access and use of a site if a few conditions were meet. One is that I would have to rely on the service that they were offering and it would have to be good and reliable. Or alternatively I would have to very much enjoy being a part of that community. Secondly, I would expect that a subscription was payed in lieu of having to put up with obnoxious advertising. For example, if Odeo said to me that I would have to pay to be able to recieve Odeo messages into my inbox for the podcast, I would agree to it. The reason being is that the service is a great one, it works, it is reliable, it is of high quality. But I would expect this fee to be reasonable as well, I won’t pay through the nose either!
So it remains to be seen if companies and websites will maintain the look and feel of their websites while meeting the need to raise revenue in order for the site to exist. I can see the need for both. But what I do not see the need for is the example of Shoutwire. It will be interesting to see what route these companies take over time as the pressure increases with more competition. Given Shoutwire, I am sure some will opt for cash and capitalism over content. In the meantime I am going to Newsvine, they look like they are doing something right.