Sometimes Good Guys Do Finish First

from the google-did-it dept

My friend Reihan Salam has an interesting piece in Slate that nicely pulls together much of the discussion at Princeton’s Computing in the Cloud workshop last month. He argues that web startups that have cultivated a squeaky-clean image start to have difficulties when they start trying to monetize all the traffic they’ve generated. The most obvious example is Facebook’s Beacon fiasco. Reihan suggests that the “immaculate capitalism” of early-stage startups gives way to ordinary profit-seeking once companies face pressures to turn a profit. There’s clearly something to this, but I think Reihan’s time horizon might be a little bit too short. Keep in mind that even the mighty Google faced questions about its profitability as it stubbornly resisted the pay-for-placement schemes that many other search engines adopted. Google’s refusal to compromise the quality of its search results for short-term profits helped it build market share, and it ultimately found non-disruptive ways to monetize all of those eyeballs. Facebook and Wesabe are much younger companies, and so it’s not too surprising that they haven’t found the right model for monetizing their users. Ultimately, their reputation with users is their most valuable asset, and so it’s smart business to safeguard that reputation, even at the cost of foregoing some short-term business opportunities.

Filed Under: ,
Companies: facebook, google, wesabe

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Comments on “Sometimes Good Guys Do Finish First”

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Anonymous Coward says:

Facebook sold out in a way that no other company would dream of… they are charing users money to send pictures of items to each other, and then they charge advertisers money to advertise. Finally to add the ultimate insult, they charge the advertisers based on information inappropriately gathered from the user base without compensating the users back for their info. Would you give out your baby sister’s movie preferences to advertisers and give her nothing in return as they generate you a profit, facebook employees? Because that’s what you’re doing with my baby sister’s movie preferences.

Matt says:

gotta agree with post #1

Sorry, but Beacon is nuts. If it weren’t for that a ton of my friends are on Facebook I’d have never joined the site.

Any site that gets info from other sites without asking me first is somewheres near lawsuit land in my opinion. It’s still only a matter of time. The unfairness here is the difficulty in pinning it down. Whose fault is it? Yelp for giving Facebook the information, or Facebook for getting it from Yelp for example?

Since those agreements are confidential the only way to get some info is to go forward with a lawsuit and subpoena. This is absolutely stupid.

No amount of PR can rationalize off that you’re just trying to monetize your customers in any way possible.

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