Wednesday, February 11, 2009

Show me the money

When the web2.0 buble hipe is fading away together with it's fantacy, start up enterpernuers and senior managers realize that they are acting within the business world and therefore the leading principle is making money (yes, saying it out load). It's not enough to have a great idea, technology in place, high skilled execution and experienced people on board, you also need a potential profitable business model and positive ROI.

Taking the number of facebook's users for example, which grown 70% in 2008 and in the begining of 2009 anounced they have 95 million users. It is an impressive figure but is it being translated to revenues? not so sure about that. Flicker is making around a $1B compare to $300M of facebook with approximately half the users.

A great post about how to increase digital goods revenue is written by Jeremy Liew, Managing Director at Lightspeed Venture Partners that basically talks about increasing the gifts product portfolio, creating more payment channels and motivating users to purchase virtual gifts. It is an interesting direction and should probably be a part of the revenues mix together with advertising, applications and premium subscription.