| There are a variety of viable options. Ads can drive a reasonable revenue stream, but it can be difficult to scale ad revenue without very significant traffic levels. Certain companies with stunning user growth, like MySpace, can make the math work. Most companies, though, may find it necessary to adopt an additional fee strategy to round out the business. A challenge here is that consumers have largely been conditioned to believe content is free. It will be interesting to see how NYTimes’ TimeSelect program fares (they are about to start charging $40/year for access to certain content and archives). Separately, transaction charges for product sales can work (see Connected Ventures, which manages CollegeHumor), but this can be challenging as consumer tastes change rapidly (creating inventory management issues). I probably prefer subscription-models. Once a company has exclusive access to a valuable asset, customers will often be willing to pay recurring fees, particularly if the asset improves over time. Zoominfo (we are investors) is a good example–they have a strong and growing business based on for-fee access to premium search tools and data. Original Location: http://www.aventureforth.com/2005/09/15/a-vcs-perspective-on-web-20/ |