When the advertising well runs dry
I read a New York Times article this morning about cloud computing and how free websites like Google Documents and Google Spreadsheets might eventually force Microsoft to start opening up its own Office products for free online.
But in terms of revenue, the only method mentioned in the article is advertising (other than charging companies small fees for “premium” editions). This leaves me wondering how many advertisers are out there and whether they can support the huge software companies that try to go free. I mean, there’s already a multitude of blogs, newspapers, video websites and search engines selling ads online, not to mention all the off-air advertising. It just seems like common sense that because of the very nature of advertising — you pay X amount of dollars with the hope that it will bring in revenue many times greater than X — that cash cow will only produce so much milk.
Don’t get me wrong, I’m all for free online products. But companies soon need to start thinking of other methods of bringing in revenue — advertising is too narrow-minded.
My idea would be for them to buy up smaller, semi-related companies and then promote the hell out of them through your free products. Then the website becomes a massive form of branding that not only carries advertising, but advertising that will directly benefit the site hosting the advertising if the products are purchased.
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2. WGA strike helps online video
Another question is whether this will drive up the premium of content that doesn’t include advertising… As a publisher, I hope so.
As a consumer… I can’t say whether I’ll notice or not. Reminds me of a story I read a while ago (published in a magazine I was part of at the time), Ad Nauseum–you had to pay for the “silence” channel, or suffer ads all through the night of trying to sleep.