More Web Business Models

Dave McClure has a post on Facebook’s potential business models. He lists three new ones that are not on Chris’s list or my list.

1) FeedSense

2) FeedSearch

3) FanPageApps

If you want to get the details of these three business models, please click thru to Dave’s post. I am getting paid a CPC from him (that’s a joke).

I am very bullish on feed-based business models. I think the news feed has emerged as the second most powerful attention aggregator after the search result page and I think it will become an incredibly valuable monetization vehicle if it is not abused.

#VC & Technology

Comments (Archived):

  1. stone

    Ahhhhh, the casualness of it all. Let’s talk about FeedSense and FeedSearch. Both “old” ideas with very large companies as incumbents…Yahoo, Google, MSN, etc. Behind these companies you will find a MASSIVE pile of patents that have created a veritable minefield for Facebook and anyone else that dares to copy the proven monetization techniques out there.Now, you might say “so what” when it comes to these issues. Money can buy them licenses, etc. but I, for one, don’t dismiss the effect patents have on innovation and business models.

  2. Christopher

    I think it’s much simpler than this. Beacon is just a way to aggregate more information about Facebook users. Profile data (demographics and psychographics) + friend data (social stats, like # of friends, frequency of contact, etc) + Beacon (third-party purchase decisions, behavioral data) = ad targeting as lucrative as a search term. To exploit this, Facebook will likely do three things: (1) Create a privacy setting for “Advertisers” like it does for Friends and allow users to set which elements of this data will be exposed to advertisers. (2) Create and license the use of an API that allows third-party ad networks to read cookies and call this data when serving ads on sites other than Facebook (e.g., this is the data source that the BT engines use). (3) Facebook will earn a hefty share of CPM and/or CPC on the ads, and potentially share this back with users to incent them to share their data with the ad networks. In the end, Facebook makes money but does not overload its site with low-performing ads; users get to better personalize their ad experience across the entire internet and potentially profit from it; advertisers get richer data for targeting and higher performing ads; and third-party publishers earn higher CPM/CPC.

  3. Harrison

    I wonder what is the CPC or CPM for FeedBurner’s ads in feeds. I don’t imagine a lot though because I haven’t heard much about it. If it makes a lot of money for publishers, I think people would be hyping about it by now.So why are you so bullish about feed-based ads?

    1. fredwilson

      Not rss feeds, news feeds or mini feeds, as in FB or Twitter or tumblr dashboard

      1. Brendan Lally

        In relation to Stone’s comments – sure they’re are lots of patents out their that the big bboys have sitting on their shelfs/. However if your startup can gathner in more users, quicker than they can and show some value they are far more likely 2 have an acquisition talk 4 what u have.Fred, I agree that min/micro/very-specialised (think vertical) feeds are where things are moving towards. The Twitter and other mini feeds are becoming easier 2 use, getting more adoption, very fast 2 grow via its own buzz/network etc.The potential is there (as long as they can prove the right foot-traffic) but very few have figured out how 2 monetize it correctly.I like the looks of and others where they are moving into very specific arenas and going after vertical alliances which are clear and precise both from a customer acqusistion aspect and “wheres-the-money”. I know nooked is pushing 2 become a platform player.Lal

  4. kid mercury

    “I think the news feed has emerged as the second most powerful attention aggregator after the search result page”so true.i wonder though about monetization. not sure how it will work. lately, i’ve been leaning more to thinking about feed aggregators/remixers (i.e. tumblr, facebook) as ecommerce destinations, thus possibly heralding the much fabled “death of advertising.” not sure though.