#Facebook again: And Biz Models
Doc Searls has taken the critical analysis of Facebook’s value to another level, by pointing out the fundamental weakness of its ad-supported revenue model. His argument is worth serious reading.
Put a somewhat different way: We assume too readily that exponential pressures mean we can just draw lines up graph paper from anything that has started to work. It’s how startups make their pitch. It may or may not be realistic. The Groupon situation is a case in point. But more tech-focused models also face the same problem. As targeted ads get more and more targeted, especially in the unwelcome context of a “social” network where we are not generally searching for products and services, will they just run out of steam as we run out of patience?
Which brings me back (sorry) to my point: We need innovative biz models to go along with innovative services. Facebook is a social marvel. Its biz model is based on deep privacy mining. Why not a subscription-based service with mutual ownership? It will be a utility soon enough. Might as well plan from the start. Of course, this horse has now bolted, IPO-style. But perhaps a lesson can be learned.