Diego Basch:

I’d much rather be a customer of web services than a product. I would pay a reasonable amount of money for a few things, especially if this removed undesired ads (I don’t care that much about that, because like most people I’ve learned to ignore the vast majority of them).

The problem is that there are not enough people like me. Most people don’t care enough about these issues to pay for the cost of the services they use (as opposed to being “product” and having no rights). There is also a perverse incentive: a service with hundreds of millions of free users is rewarded by the stock market or private investors because in theory they could find a way to sell something to all those “people.” For example, Facebook’s valuation is not justified by its current business model based on display ads. Even at today’s stock price, their price-to-earnings ratio is much higher than that of comparable companies with similar growth rates (see GOOG, YHOO).

For agents and brokers Trulia, Zillow and Realtor.com fall into the product vs customer challenge.

§1282 · August 13, 2012 · Uncategorized · · [Print]

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