Pricing is critical to your online success
This blog post is in continuation of my last . Traditional marketers put a lot of emphasis on pricing, both of products and services. After all nothing comes free of cost and nobody respects free stuff. But conventional thinking was thrown to the winds when Microsoft purchased a little known free email provider Hotmail for a few hundred million dollars. The flood of free sites erupted like a rash all over the internet in the hope that someone will purchase them at astronomical prices. The dotcom boom and bust happened because of this free disease and for quite some time people avoided this free stuff like a scourge. Sun Microsystems went almost bust at the end of dotcom era.
But social media changed this landscape once again. Many new free sites started appearing on the scene. This time Google lapped up many of them for astronomical price with Microsoft joining the band wagon along with giants like Oracle. But there was some method to the madness. Oracle purchased competitors in database space and Microsoft fortified its Office suite. The surprise element was Google. They purchased seemingly unrelated web properties for mind boggling sums. Surprisingly Google did not go down under the weight of these acquisitions- YouTube, MySpace and many more.
The focus of my post is the strategy one must follow to monetize web properties. Is it still a good bet to launch websites in the hope that some big guy will buy it at phenomenal price? I admit that I have not done any in-depth research on the subject, but it seems as if Google and co. have lost the appetite for big acquisitions. Look as Twitter .I would have thought that someone would just swallow the bird midway through the twittering. But there has not been much excitement on this count. Maybe, the economic slowdown has something to do with it. I feel that there are some other forces at work here. The return on such huge investments made earlier has been unsatisfactory. Thousands of social media sites shot up a couple of years ago and most went down like a sack of potatoes. I am sure many lost their shirt in the process. The viability of new social sites is questionable. If anyone is trying this now, they better be careful.
The other option of paid sites is not an option at all. We, the netizens have become used to free stuff. Our pampered brain is going to reject even a slight hint of payment. Even paid porn sites have lost their steam with YouTube and other free amateur sites taking over the porn space. This goes to show that none of us are prepared to pay for online services. So where do we stand? Is there no way we can make money from websites?
For one, Google has shown the way. With Google Ads we can monetize our sites though the prospect is not very lucrative. Google with its pay per click has led to the death of banner ads which used to be money spinners for some websites. I can think of ecommerce sites like amazon.com and eBay which provide a platform for buying and selling goods and services. These sites survive on commissions paid by sellers. But the problem is that this space is occupied by these giants and it will take some doing to dislodge them.
The only space which really excites me is the Saas or software as a service. Also cloud computing, which to me is hardware as a service. More and more organizations are opting for this model. Instead of paying Microsoft a great deal of money for their software, it is economical to adopt the software as a service model. The advantages are obvious. Cloud computing is a rage among the geeks which means common folk like us will catch up with it in a few months. In cloud computing model businesses can bring servers online as required and retire them when no longer needed.
How to fit in our social media framework to this larger movement is where the money is today. Businesses are adopting Web 2.0 practices which require tools from social media setup. Depersonalizing social networks and adopting them to organizational practices using Saas is something smart guys are already working on. The open source movement is giving impetuous to this approach. I hope readers of my blog would reflect on my observations and come up with their views.
To make money from social networks may indeed be a possibility if we take the approach which I have suggested. Those who are still hoping to be bought by big guys are driving toward a dead end.
