Is the ad purveyor model all that ridiculous?
Here’s the flip side to something I posted in my Empoprise-BI business blog on Monday regarding Microsoft Surface.
I was reading the print edition of InformationWeek, and I saw the following statement in a letter to the editor:
Google is, when you get down to it, just an ad purveyor. Anything else it does is simply to amplify its ad business. This isn’t a model that any sane enterprise should hang its hat on.
Of course, this argument has been raised before, especially during the first dot.com boom – and bust. All of those big and small businesses who base their entire revenue plan on selling ads. Ridiculous.
And I’m sure that all of these naysayers got a lot of coverage on the radio and TV.
See where I’m going here?
Google and the rest of the tech sector aren’t the first batch of companies to create a business plan that consisted of giving the product away to consumers for free, and by selling ads to businesses. That business model has been around for years, and can be found in over-the-air TV and over-the-air radio. When I hear ads on my free version of Spotify, it’s not because Spotify is copying Google – it’s because Spotify is copying Clear Channel.
Perhaps someday Americans will have to watch the Super Bowl via pay per view, but as of now there’s no move to make viewers pay to watch the Super Bowl. Why not? Because the NFL and the networks make too much money from the current system, in which the television and radio broadcasts are provided to as many people as possible, the NFL makes its money by selling rights to these television and radio broadcasters, and the broadcasters themselves make their money by selling 30 second ads for millions of dollars.
Why would any sane enterprise want to follow the stupid ad purveyor model?