business model - ReadWriteWeb http://www.readwriteweb.com/feeds/tag/business model en Copyright 2012 Richard MacManus readwriteweb@gmail.com Wed, 15 Feb 2012 10:45:03 -0800 http://www.sixapart.com/movabletype/?v=4.35-en http://blogs.law.harvard.edu/tech/rss Big Question (Answered): "Would You Buy an Inferior Tablet, Over an iPad, If It Was Priced at Less Than $200?" big-question-150.pngThis weekend, many people elected to buy a tablet that runs software whose future is uncertain. Its fire sale price seemed to tip the scales. But we wondered if that was a flash in the pan. Is it something most of you would do, typically, or was this just a reaction to a one-time sale. If some tablet manufacturer tried this as a business model, would people buy their inferior product over the market leader? So, rather than continue to ruminate on this, we asked you, "Would you buy an inferior tablet, over an iPad, if it was priced at less than $200?".

You answered and we culled your responses from Twitter, the original post and Facebook, and used Storify to present it all back to you. If you have additional responses, please leave them in the comments.

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http://www.readwriteweb.com/archives/big_question_answered_would_you_buy_an_inferior_ta.php http://www.readwriteweb.com/archives/big_question_answered_would_you_buy_an_inferior_ta.php Apple Tue, 23 Aug 2011 13:30:13 -0800 Robyn Tippins
Evernote Gets Down to Business: Launches Sponsored Accounts for Schools and Companies leweb_logo_dec10.jpgEvernote just announced the launch of sponsored business accounts for organizations and businesses. These new account types will give schools, businesses and other organizations the option to pay for their members' and employees' accounts. As the company's CEO Phil Libin just told us during an interview at LeWeb in Paris, the majority of the tools' users (80%) are already using it both at home and at work. The sponsoring organizations won't be able to access their users' accounts, though. As Libin told us, while this is a business-focused feature, the company has no interest in launching a separate enterprise version of Evernote but its customers demanded this new feature.

]]> Evernote will charge these sponsoring organizations the same fee as individual users pay today (though educational institutions and users will get the same 30% discount they are currently getting). Businesses and other sponsoring organizations can upgrade the accounts of existing users. once an employee leaves the company, Evernote will not delete any data but will offer the user to either pay for an account or downgrade to the free tier.

Libin stressed that Evernote does not want to be in the business software market. Instead, he wants Evernote to focus on its current straightforward business model ("I don't like clever business models," he told us today).

The State of Evernote

evernote_logo_nov10.jpgLibin also gave us a quick update on the state of Evernote. The company currently has around 150,000 paying users and expects to reach the 6 million user mark by the end of the year. About 18,000 new users sign up for the service every day, coming from both the mobile apps and the web and desktop services. The majority of its users are currently in the U.S. (57%), but Libin expects that this number will drop as Evernote acquires more users in Asia (especially Japan where NTT DoCoMo now preloads its Android phones with free access to the premium version of Evernote). Libin also expects to see a lot of growth in Latin America next year.

Talking about Evernote's freemium model, Libin told us that users don't convert well from the free to the premium accounts in their first few months on the service. Users really only convert after about 6 months of membership and today, 20% of Evernote's oldest users (more than 2 years of membership) are premium users.

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http://www.readwriteweb.com/archives/evernote_gets_down_to_buiness_launches_sponsored_a.php http://www.readwriteweb.com/archives/evernote_gets_down_to_buiness_launches_sponsored_a.php News Wed, 08 Dec 2010 09:00:00 -0800 Frederic Lardinois
Free: It Works, It Cries, It Bites Chris Anderson's new book, Free: The Future of a Radical Price (available for free in text form and as an audio book), is stirring controversy and a spicy conversation around the blogosphere. The current wave of discussion started with a critical review by Malcolm Gladwell in the New Yorker. In his review, Gladwell defends journalism and goes negative on "Free." Seth Godin, who till then had stayed out of the debate, penned an instantly classic Godin post titled "Malcolm is wrong."

Mike Masnick followed on TechDirt with an insightful post in which he attributes some of Gladwell's confusion to the way that Anderson wrote the book. Masnick says that the book does not provide enough details on the mechanics and applications of Free. (I haven't read the book, so I can't comment on that.) Fred Wilson joined the conversation with a sharply delivered post on Freemium and Freeconomics. He gives examples of the kinds of Free that actually work.

]]> Mark Cuban followed with the somewhat metaphysically titled post, "When you succeed with Free, you are going to die by Free." And last but not least, Brad Feld pondered, "Would you want it if it were free?"

So, as Albert Wenger wrote recently, there is "continuous confusion about free."

This is because the topic is broad, and everyone is taking a different angle. In this post, we will break down Free into three separate classes: the kind that actually works, another that struggles, and the last that can be dangerous.

Freemium: When Free Really Works

Fred Wilson nails it on the head when he identifies the two instances when Free actually works. The first instance is the service or software that offers a free trial and then converts users into paying customers. There are different flavors of this approach, the most popular being, give the basic version for free and charge for the advanced version.

An early example of this model was online email, where you got a certain amount of storage for free and had to pay for more (see more about this, though, in the section on when Free is dangerous). Other examples in this category include project management software, like 37signals, and online photo collections, like Flickr.

The second instance that Wilson identifies is the consumer service that manages to build a massive audience. Citing Facebook as an example, Wilson says, "Free gets you to a place where you can ask to get paid." He argues that because Facebook has managed to amass such a valuable asset, it is able to monetize in any number of ways. Citing Business Insider, he lists Facebook's revenue:

  • $125 million from brand ads,
  • $150 million from its ad deal with Microsoft,
  • $75 million from virtual goods,
  • $200 million from self-service ads.

Interesting that all but one revenue source here (the virtual goods) is advertising. The only thing that consumers of this Free service were willing to pay for was a supplemental service in the form of virtual goods.

In any case, the main point is that, given a truly massive audience, monetization opportunities present themselves, at the very least in the form of advertising.

Old Media: When Free Cries

It is ironic that the very thing that makes large consumer services successful also makes old media cry. Online advertising does not seem able to deliver the kind of revenue that old-fashioned subscription services did. The culprit? A drastic drop in the cost of publishing, and complete destruction of barriers to entry. Even at the turn of the century, publishing was a closed game. Today, anyone can be a publisher, thanks to the read/write Web (no pun intended).

What really angered Gladwell was Anderson's verdict on journalists. Gladwell writes:

"It is not entirely clear what distinction is being marked between 'paying people to get other people to write' and paying people to write. If you can afford to pay someone to get other people to write, why can't you pay people to write? It would be nice to know, as well, just how a business goes about reorganizing itself around getting people to work for 'non-monetary rewards.' Does he mean that the New York Times should be staffed by volunteers, like Meals on Wheels?"

While this question is valid, it misses the point. It does not matter whether journalism should be free or not. The issue is that those old media profit margins are nowhere to be found anymore. And so the money dissipates, the way that the big VC money from the '90s can no longer be deployed in tech.

To answer Gladwell's question, journalists will still get paid, but they will get paid to work at smaller outfits, like ReadWriteWeb.

Free, abundant content and more nimble, agile news sources from the blogosphere and Twitter are striking a deadly blow to old media. Old media cries because it can't figure out how exactly to remain the way it was. Ultimately, it can't.

Monopoly: When Free Bites

Most of the discussion around Free focuses on the freemium model and media. When we wrote about Free earlier, we focused on a different side of it: how Free can be dangerous.

The problem is that large companies can exploit Free in a way that is essentially monopolistic. A large company could enter a brand new market to undermine competition. Consider Google Docs, a completely free consumer product that serves no ads and competes with Microsoft Office. A subtler example is Gmail, which does display ads (even if they don't attract many clicks) and has limited storage, but the limit is so high (2.5 GB) that the product is essentially free.

Free can also be used to kill off competition and create a barrier to entry. IBM was the main player behind the open-source project called Eclipse, a platform for building software applications. Seemingly innocent and even good for the world, the initiative managed to kill off all of the small and mid-sized players in the market within five years. In doing so, it killed innovation and became the de facto tool for building Java applications.

When I spoke about the danger of Free during a recent summit on Freeconomics, I brought up a point that did not seem to resonate with the audience. I wondered, what are the moral implications of Free, and what specific impact does Free have on children? For example, what is it like to grow up in a world in which most software is Free? Does Free create a sense of entitlement? Does it lead people to wonder why they should pay for anything at all? Where do we draw the line on what should and should not be free? These questions are not simple and are certainly far from being answered.

Conclusion

Clearly, Free and Freeconomics are broad and complex topics. No single post could begin to address all of the issues involved. Anderson's book is timely and important. While we need to be careful, Free is also inevitable. Not only is it our future, it is already our present. So we need to understand what it is and what impact it has on the Internet, our lives, and our children.

The debate that is unfolding around Free is fascinating to follow and even more fascinating to participate in. So join the conversation with your posts, comments, and tweets!

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http://www.readwriteweb.com/archives/free_it_works_it_cries_it_bites.php http://www.readwriteweb.com/archives/free_it_works_it_cries_it_bites.php Business Mon, 06 Jul 2009 23:33:25 -0800 Alex Iskold
How Japanese Newspapers are Trying to Save Themselves Hint: They're Using iPhone Apps

The newspaper industry is in a downward death spiral, having been severely impacted by new technologies, the ubiquity of internet access, and a rise in citizen journalism. Here in the U.S., some papers are filing for bankruptcy, others are close to doing the same, and there's even a proposal to give the newspaper industry a bailout plan of its own. Elsewhere in the world, it's more of the same. In Japan though, the country's high population of elderly citizens is keeping the papers afloat...for now, at least. But like everywhere else, they will soon have to face the future: young people don't do newsprint.

]]> As noted by the Washington Post in October of 2008, Japan's newspaper industry is still "surprisingly spry." The country's five big national dailies have kept nearly all their readers, only slipping 3.2 percent in circulation during the last decade. Compare that with the drop of over 15 percent in the United States, for example. Still, the industry in Japan is just as worried as everyone else because they can see the future ahead of them.

"I am in a dying industry," said Kenichi Miyata, a senior editor and writer at the Asahi newspaper, a daily with a circulation of 8 million. "Young people do not read newspapers, and our population is getting very old very rapidly."

Japanese Papers Collaborate on Mobile App

In many parts of the world, individual newspaper companies are trying different things to revitalize their industry. For example, we've seen a lot of innovation from the New York Times lately, as they embrace open data and APIs. (Disclosure: The NYTimes is a syndication partner of ReadWriteWeb.) 

However, there's still a feeling of "it's everyone for themselves" when it comes to developing new business models. In Japan, however, three of the major newspapers have decided instead to band together. The papers are all members of the Nikkei-Asahi-Yomiuri Internet Business Partnership, a group formed nearly a year ago to launch a web site that featured all their articles together in one place.

Now, those papers have once again collaborated on a new effort to bring their content to the tech-obsessed youth. Last week, the three collectively introduced an iPhone/iPod Touch application which delivers the cover stories, city news items, editorials, and pictures to the owners of Apple's smartphone.

The application is unique as it lets consumers browse and compare the coverage of news stories by the different papers all within one single interface.

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Some Problems

The application is not without its faults, though. Although it sits at the top of the free apps section in the Japanese App Store, it's not very highly rated. This is because the app doesn't provide the full text of the papers, only abstracts. In order to read the complete article, users must click a link to go to the paper's main web site. That extra effort probably frustrates users, leading to its low rating of only 2 stars. In comparison, another news organization, Sankei Shimbun, has an app which does provide the full text. In time, through download counts and popularity ratings, it should become apparent how important full text is to a newspaper app's success.

At the moment, the new collective iPhone/iPod application isn't monetized, but the companies involved hope it will motivate customers to actually read the physical newspapers. We doubt that will happen, but it will certainly be interesting to follow the success or failure of this newspaper triad. Will there be safely in numbers? We don't know yet, but it's a possibility worth looking into.

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http://www.readwriteweb.com/archives/how_japanese_newspapers_are_trying_to_save_themselves.php http://www.readwriteweb.com/archives/how_japanese_newspapers_are_trying_to_save_themselves.php Trends Thu, 19 Feb 2009 06:54:25 -0800 Sarah Perez
Twitter May Have Found Its Business Model Twitter...what is it good for? It turns out this little service is good for a whole lot of things, despite the loud objections of people who've never really tried it. Even among true believers, though, it's been hard to figure out how this much loved company is going to afford to stay alive. How will Twitter make money?

A number of people noticed a new change made to Twitter today that could show just how it's going to happen. Of course this is just speculation, but we believe it's a pretty good guess that this could be what goes down.

]]> Selling Friends

Professional hustler turned CEO Jason Calacanis spelled it out on Twitter tonight. The new Twitter "suggested friends" feature (first blogged by Pete Cashmore) is a natural place to sell friend connections between users and companies wanting to communicate with them.

Twittersugg.jpg

Who says you can't buy friends? $1 per user who takes the suggestion and opts in to getting messages from @JetBlue or @Zappos? That could happen. Could those companies keep their freshly purchased friends? Only if their Twitter output stayed interesting!

In order for this to work, Twitter is going to have to make these recommendations a lot more prominent in the user experience and it's going to have to increase the quality of the non-paid recommendations. Right now they don't look very exciting to us. We like to search Twellow to find interesting new users to follow.

A Logical Opportunity

It's a common tactic among Facebook apps for the little ones to buy introductions to users from the big ones. It's pretty traditional lead sales, in fact. We'll see if something like that works with Twitter - it's certainly better than advertising that you don't have any choice about receiving!

Outside reports indicate that many Twitter users struggle to find friends on the service. Almost 10% of users haven't added anyone as friends at all, in fact, something that would make the service fairly pointless. Put that together with the fact that, according to a study by trademark attorney Erik J. Heels, 93 of the top 100 US brand names don't appear to have control over their brand names on Twitter. Put those together and what have you got? An opportunity for Twitter to make money.

Would this be enough money to make Twitter viable? That we're not so sure about. Outside reports put the number of Twitter users at 4 or 5 million users, and that after everyone from CNN to Britney Spears to The_Real_Shaq has jumped on board. How much bigger is it likely to get? We don't know, we just know we like using Twitter a lot.

When Evan Williams started Twitter, he didn't care. As Sarah Lacy explains in Once You're Lucky, Twice You're Good, Williams had enough money in the bank from the sale of Blogger to Google that he didn't have to think about Twitter making money and he didn't want to think about it. That changed quickly when scalability required backing from investors and Twitter became a real business. Now it's the biggest question many of its users have about the service they love so much.

You can meet and be friends with the ReadWriteWeb crew on Twitter for free! Just check out this slide show of all our accounts.

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http://www.readwriteweb.com/archives/twitter_may_have_business_model.php http://www.readwriteweb.com/archives/twitter_may_have_business_model.php Analysis Thu, 15 Jan 2009 19:39:36 -0800 Marshall Kirkpatrick
Even More IM at Meebo: Facebook and MySpace IM Added meebo_logo_oct08.pngMeebo, the leading Web-based IM service, has reached its current level of popularity by providing Web access to popular IM interfaces like AOL, MSN, and GTalk. Meanwhile, in parallel, there has been another growing segment of instant messaging taking hold in popular social networks. It was only a matter of time before Meebo extended its functionality to embrace this growing market - and now it's happened with Meebo's Facebook and MySpace IM integration.

]]> Like the IM services already accessible from Meebo, Facebook and MySpace IM accounts are now available from within Meebo, allowing users to simultaneously chat with friends from both networks, while also having access to other IM contacts.

imgMeeboFacebookMySpace.jpg

The MySpace team worked with Meebo to assist with its integration. The Facebook integration relies on Facebook Chat for Pidgin, an open source IM project.

With the addition of these massive user bases, Meebo becomes - arguably - the premiere service for managing all of your IM conversations in one place. That's impressive in and of itself. But it also hints at something even more interesting for the future with Meebo's Community IM initiative.

What's Community IM? It's a Meebo project that will introduce Web-based IM features to a number of community oriented sites over the coming months, allowing users of those sites to engage in IM conversations when visiting their favorite Web sites.

What's more, it's a concept that's strikingly similar to Facebook's chat implementation. And that's where adding Facebook access gets really interesting.

With Community IM, Facebook users - who are already familiar with concept of logging into a Web site and chatting with friends - will now have access to their Facebook friends through Meebo when visiting any number of sites on the Web. Same goes for MySpace. That means sharing something with Facebook or MySpace contacts becomes as easy as firing off an IM message through Meebo. No more bookmarklets or cutting, logging in, and pasting. Now, it's as simple as sending an IM.

So, without much fanfare - and much in the same way Facebook Connect, Google Friend Connect, and the Open Stack are extending the reach of the social graph - it looks like Meebo just moved the Web-based IM conversations of millions of users and their contacts beyond the walled gardens of social networks to the Web at large. And that's pretty exciting.

To try the new Meebo Facebook and MySpace access, log into your Meebo account and add the new accounts to your profile. Or visit Meebo and log into your Facebook and MySpace accounts from there.

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http://www.readwriteweb.com/archives/meebo_facebook_myspace.php http://www.readwriteweb.com/archives/meebo_facebook_myspace.php Messaging Services Tue, 23 Dec 2008 01:02:19 -0800 Rick Turoczy