Should Web 2.0 sites share revenue with their users?
Google released an adsense API that allows websites to share revenues with their users. And Pete Cashmore wonders if it’s a good or a bad thing.
If set up incorrectly, revenue sharing can lead to an adverse selection problem – you attract spammers and scammers who are motivated solely by the money. The other issue is that without high value content, the rev share is abysmally low – Squidoo’s top earners get $30 per month, for instance. And let’s not forget that Google’s minimum payout is $100 […]. I think this is a great move on Google’s part, but it’s still up to site owners to get the motivation part right.
We have been considering revenue sharing on coComment for a while, but I can’t think of a completely satisfactory solution. Sharing is relevant as users are generating content that we then reuse to create value. But in the meantime we pay the bills to develop and maintain a free service (and there are side effects as Pete explained).
So what’s the right balance between the value of the tool and the value of the content?
June 1st, 2006 at 5:44 pm
Hmm…complex problem. Well, you’ve basically amassed a whole load of great content for free (just like del.icio.us) by providing a good selfish motivation (“keep your comments in one place”). Presumably if you did some SEO, this could start turning up in search results, and you could start earning some decent ad revenue (you basically own the entire commentosphere).
If (once you’ve started monetizing all that traffic with ads) the commenters decide they want to get paid, then you can consider it. And yes, something like the Google Adsense API would work.
But what’s the stronger motivation right now – getting paid, or having all your comments in one place? I think it’s the latter, and you should get that piece right first.
(And yeah, I know I suggested early on that you should consider rev share. If you really wanted to try it, maybe you could roll it out to a few key users and see how it goes down.)
June 1st, 2006 at 5:44 pm
Hmm…complex problem. Well, you’ve basically amassed a whole load of great content for free (just like del.icio.us) by providing a good selfish motivation (“keep your comments in one place”). Presumably if you did some SEO, this could start turning up in search results, and you could start earning some decent ad revenue (you basically own the entire commentosphere).
If (once you’ve started monetizing all that traffic with ads) the commenters decide they want to get paid, then you can consider it. And yes, something like the Google Adsense API would work.
But what’s the stronger motivation right now – getting paid, or having all your comments in one place? I think it’s the latter, and you should get that piece right first.
(And yeah, I know I suggested early on that you should consider rev share. If you really wanted to try it, maybe you could roll it out to a few key users and see how it goes down.)
June 1st, 2006 at 8:01 pm
It’s interesting that everyone seems to be putting all users into a single bucket labeled “users” (and in the case of coComment, that makes sense). In many online community systems (what we used to call such services), there are two levels of users—those who create structure and those who hang content from structure. The users who create structure are considered to be the people who define, build, and foster individual communities.
It makes perfect sense to share revenue with the community builders. AOL became who they are today by standing on the shoulders of their paid community builders (a slight exaggeration, but you get my point ;-). And, if spammers do the work necessary to foster thriving communities (unlikely), then by all means, pay them!
June 1st, 2006 at 8:01 pm
It’s interesting that everyone seems to be putting all users into a single bucket labeled “users” (and in the case of coComment, that makes sense). In many online community systems (what we used to call such services), there are two levels of users—those who create structure and those who hang content from structure. The users who create structure are considered to be the people who define, build, and foster individual communities.
It makes perfect sense to share revenue with the community builders. AOL became who they are today by standing on the shoulders of their paid community builders (a slight exaggeration, but you get my point ;-). And, if spammers do the work necessary to foster thriving communities (unlikely), then by all means, pay them!
June 1st, 2006 at 11:31 pm
@scott: I agree, this distinction should be part of the debate. In the coComment case people are first and foremost creating value for themselves, and out of this behaviour comes value for the community (just wrote a post on that here).
Money becoming the main motivation for users could create a lot of problems. Because money isn’t usually tied to quality but rather to quantity (i.e. you have more chance to have someone click on your ads if you make 50 lousy comments than if you make one great comment), this might kill the wisdom of the crowd effect.
@pete: we’ll do as you say, see what people are asking for (actually we already had a few requests on the blog) and test with a few users to see if it makes sense.
June 1st, 2006 at 11:31 pm
@scott: I agree, this distinction should be part of the debate. In the coComment case people are first and foremost creating value for themselves, and out of this behaviour comes value for the community (just wrote a post on that here).
Money becoming the main motivation for users could create a lot of problems. Because money isn’t usually tied to quality but rather to quantity (i.e. you have more chance to have someone click on your ads if you make 50 lousy comments than if you make one great comment), this might kill the wisdom of the crowd effect.
@pete: we’ll do as you say, see what people are asking for (actually we already had a few requests on the blog) and test with a few users to see if it makes sense.
June 2nd, 2006 at 6:04 pm
On the same subject:
Openness allows for innovation. Innovation creates value. Value creates incentive. If that were all there was, it would be a virtuous circle, because the incentive would be to create more value. But incentive is value-neutral, so it also creates distortions — free riders, attempts to protect value by stifling competition, and so on. And distortions threaten openess.
As a result, successful open systems create the very conditions that require a threaten openess. Systems that handle this pressure effectively continue (Slashdot comments.) Systems that can’t or don’t find ways to balance openess and closedness — to become semi-protected — fail (Usenet)
Clay Shirky
I applies to the revenue sharing question I think
June 2nd, 2006 at 6:04 pm
On the same subject:
Openness allows for innovation. Innovation creates value. Value creates incentive. If that were all there was, it would be a virtuous circle, because the incentive would be to create more value. But incentive is value-neutral, so it also creates distortions — free riders, attempts to protect value by stifling competition, and so on. And distortions threaten openess.
As a result, successful open systems create the very conditions that require a threaten openess. Systems that handle this pressure effectively continue (Slashdot comments.) Systems that can’t or don’t find ways to balance openess and closedness — to become semi-protected — fail (Usenet)
Clay Shirky
I applies to the revenue sharing question I think
June 20th, 2006 at 9:21 am
Newsvine will be sharing ad revenue on your own content with you, perhaps you’ll want to look into the reasoning behind that?
June 20th, 2006 at 9:21 am
Newsvine will be sharing ad revenue on your own content with you, perhaps you’ll want to look into the reasoning behind that?
June 23rd, 2006 at 10:43 am
Mark: I think Newswine is a different case: you create content for them (= you work for them) while in coComment the content you add to the system is via a service that gives you value as a person, for free.
June 23rd, 2006 at 10:43 am
Mark: I think Newswine is a different case: you create content for them (= you work for them) while in coComment the content you add to the system is via a service that gives you value as a person, for free.