Monday, October 09, 2006

Relying on the advertising model...

I am starting to really work on a project that I have been fiddeling around with for the last 10 years. There are several assumptions I had going into this endevour about where the revenue would come from. Recently, with the trend going towards advertisement supported free services, I wonder how much will people actually pay for and should I seriously be considering that.

Then it got me thinking. How much ad revenue is there really for the smaller companies, not Google or Yahoo or the ESPN's of the world. What makes companies such as AOL move to this model and assume that ad based revenue is enough to fuel yet another large company? There must be some data that these guys are going off of besides the fact that others have done it? If anyone has seen this please let me know I am quite interested as for the projections.

There are some bigger questions I have begun to research though prior to just jumping in. Does making a service free via ad based revenue dilute any type of user loyality? Does ad based revenue models turn users away? Can you mix a subscription service with an ad based service or do user expect the moment they see ads that the services are free? Any thoughts out there?


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