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Apr 9, 2009 | Rethinking the way to make money online

With the Associated Press raising a row about how to reign in its news sources, twitter banging its head on how to make revenue, and Encarta being dropped because of bad marketing, one cannot help but notice that businesses are scrambling to maintain their revenues in this cash-strapped economy. So here are some things that could be done:

Oops!

Not such a good idea Make the consumers pay: If Kindle can pull off charging $13.99 per month for subscription to the New York Times, surely people won’t mind paying for online news, right? Well if the fact that the New York Times succumbed to reality and opened its archives is any indication, if people can find it for free elsewhere, they will do so. Unlike cable TV, there isn’t a monopoly when it comes to the web, and paying for something online isn’t necessarily that you’re getting something better.

Not such a good idea Offer fewer services: The Google Cemetery now includes Google Lively and Notebook, and it seems as though online storage is a bad path to follow. If you’re going to save money, it seems wisest to stop wasting it. But the disadvantage to that is something less recoverable than money: image. Besides, cutting back services also means cutting back employees.

Not such a good idea Entice readership with freebies: Though it initially sounds promising, I think it’s more of a recipe for disaster. The added expense of providing free items or promotions rarely translates to a dedicated following, unless you have a good product to provide in the first place. However, it’s a fantastic idea to provide an offline-to-online promotion that need not necessarily cost you. For example, a print ad can suggest going to your website and entering a promocode for a free one-month trial of a feature they may not obtain otherwise.

A great idea Let users have control: one of the more empowering forms of online payment is to use “credits” that give users the control over how much they spend, instead of having a monthly fee that feels more like a bill rather than a purchase. Giving users the financial control while rewarding them (like giving them extra credits for referrals or even at random) is another bonus, but above all keep it simple.

A great idea Embrace the advertisers, improve your product, and hunker down: The good thing about a bad economy is that people still need to buy things. Advertisement is perhaps the only win-win scenario available online, for both publisher and provider, and online consumers are tolerant enough to understand that advertisement is a necessary evil if it means the content provided is solid, reliable, and good.

So here’s what I say: the people who will end up better off online as the economy (inevitably) will improve will be those who realize that investing in improving your products will put you farther ahead than cutting back for the temporary losses.

This entry was posted on Thursday, April 9th, 2009 at 5:37 pm, EST under the category of Web design. Both comments and pings are currently closed.