Venkatarangan TNC

Mix 08 Day 2 - Web 2.0 Sustainable?

Members in the panel:

Don Dodge - Microsoft
Kimbal Musk - CEO, Me.dium
Robert Scoble - Fast Company
Dave McClure - 500 Hats
Kevin Rose - Founder, Digg
Ryan McIntyre - Foundry Group (Representing Venture Capital in the panel)

Social networks today don't make much money, and that is very crucial for Myspace and Facebook on how to make money and help their ecosystem.
Remora model (A small fish latching on to a big fish to swim). An example was Photobucket depending on Myspace and then Myspace cutting them out
Digg is making money with Microsoft's Advertising deal. Digg making money from people who are submitting, how do they feel?. Digg feels it is not work, if work you will not come. It is because you care to share. Digg is working on to make it easy to submit/share with friends/submit on the homepage, all with a single-click no need to visit Digg at all
Excite when it was started few million dollars just for the basic servers to crawl few million sites and the RAM alone was like $70,000
The VC companies will find it difficult to invest in companies that they invest less and make 5 to 10 x revenues. Most People are not doing the maths correct, so if a VC is investing $25 Million then they are looking at exists at $100 to $200 Million levels. There are few acquiring possibilities at this level.
Don't focus on the run of the mill CPM rates. instead go for the niche audience where you can charge like a magazine
There was a great question on "Why Web 2.0 is only USA and not open to Europe. There is no recession in Europe, still why no monetization efforts outside USA"
Me.dium had to launch the beta only with $0.5 Million investments just on hardware. Me.dium's long term goal is to get the real nuggets of click thru' to understand and identify important activities from clickstreams. Google has solved 1% of the problem of what you are intending to do and that is working out to several billion of dollars
Web 2.0 is loss leader for something, nobody knows for what yet
Me.dium when they launched were scared about privacy because they want users to give all information that they can give. Robert Scoble says "Privacy is dead".
For every niche services that will cost $10 or less per month you might want to charge. Here again not your 100% will be paid, but you can give initial service free and convert some percentage as paid
One of the research shows that 3% of your free audience will maximum convert to paid