by Mike Masnick

Pretending You Don't Want To Profit As A Marketing Strategy

from the how-very-Craigslist-of-you... dept

The NY Times is running a story about how companies are discovering that sometimes they need to compete with others whose motives aren't always to maximize profits. It could be an interesting topic, but is fumbled by the Times. It has two obvious examples: Craigslist and Firefox -- however, doesn't get into the motives of either operation, nor point out that anyone really "threatened" by either has basically missed the point. It's too bad, because it is an interesting topic. However, where the article really becomes problematic is that it tries to lump startup LaLa with the others, as a company that is somehow foregoing profit. You may recall LaLa. It orchestrated quite a coup last month getting a ton of big name publications to write about its "unique" business model -- that is actually an exact replica of Peerflix (which has its own problems), without mentioning the comparison or all the companies in the past that tried similar business models and failed (often miserably). We noticed that many of the reporters who covered LaLa also offered a limited number of users "exclusive" passes to try out the system -- meaning that they were hardly exclusive. Either way, about the only way the reporter can make the argument that LaLa isn't about the profits is by talking to the company's CEO who says they're not about the profits, but that they just like music. Yeah... sure... Meanwhile, this company that isn't about the profits has already raised $9 million from VCs who we're pretty damn sure thought they were investing in a venture that they believed would be profitable. A note to the NY Times reporter: just because the CEO of a company claims that they could sell something for four times the price, it doesn't mean they're "foregoing" profits -- especially when their competitors seem to charge the exact same price they do. It seems like the reality is that this company has decided that "altruism" is the latest way to get press... and it's working.

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  • identicon
    Anonymous Coward, 3 Apr 2006 @ 10:14am

    Whatever. Lala.com rocks! I've already exchanged over a dozen CDs with other Lala users. 12 CDS, $12 bucks. Plus, I just rip them and send them on to someone else. Every time I smile at the fact that the RIAA can't do a damn thing to stop me!

    reply to this | link to this | view in chronology ]

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