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The Bottom Of The Food Chain

By Richard Lowe
Posted Thursday, June 17, 2004

I have nothing against a company trying to make an honest dollar in exchange for a useful service. After all, that is why companies are in existence.

Those internet companies which provided free services and based their existence on supporting those services with advertising are having a tough time right now. The advertising model is based upon network television's success at providing free programming in exchange for the viewing of advertisements.

The most significant issue with this model (on both television and the internet) is the fact that the customer is not the viewer or user. The customer is the advertiser. The actual user of the service is the commodity which is being sold. That's why the Neilson ratings are so important to the network stations - they determine how many viewers are watching so that commercial time can be sold. The higher the rating, the more likely sales are to occur and the higher the rates can be.

The model gets even more convoluted with services such as GeoCities and Egroups. You see, the model normally has three components: the company selling the advertising (such as Yahoo), the advertisers (the real customers), and the users (the viewers of the ads). Egroups and GeoCities adds a forth grouping.

This is the content providers. In network television, content is purchased directly by the networks and carefully planned to be of maximum desirability to advertisers. In the case of Yahoo and similar companies, the content is created by a legion of volunteers, all more or less industriously working to make money for the corporate machine.

Who are these content providers? Why, anyone who has a web site (in the case of GeoCities) and runs a mailing list (in the case of egroups). As you create web pages or send emails you are actually giving content to the company, in which they place advertisements. People look at your content and view the ads.

Unfortunately, in this model the content providers are not worth much to the company. After all, there are plenty more where they came from. Someone will always want a free web site or mailing list or whatever in exchange for the showing of ads.

That is the main reason why the service from companies with this model tends to be exceptionally poor - the content providers are the lowest critters on the food chain.

This is very easy to see. Let's say someone puts up a web site on one of these free providers which has some questionable content, perhaps not exactly in violation of the terms and conditions but it could be interpreted that way. You will find that the web site will be deleted immediately and without warning on the first email complaining of a violation. There is usually no investigation, no appeal and no recourse for the webmaster.

In a more sane model, the webmaster directly pays for his site. If a complaint is made, the company will generally be much slower on the trigger, and much more likely to listen to the webmasters than in the advertising based model.

As advertisers have become more savvy to the fact that promotion on the internet is not nearly as cut-and-dry or simple as expected, they are spending their money more carefully. This has resulted in far less income for the internet companies (resulting in many business failures), and it can be quite entertaining to see how desperate the survivors are becoming.

Egroups moved their ads from the bottom of their emails to the top, and changed them from text links to graphics banners. Users of the service hate this change almost without exception, but advertisers want their banners seen, and the top is better suited for that purpose. It's completely irrelevant what the users think (unless, of course, they defected in mass, which they have not done).

In addition, egroups subscribers were recently shocked to learn that they will now, by default, receive numerous spam emails in exchange for using the service. There is now a new screen which lists all of the different categories for this spam along with a yes/no option to allow it to be stopped. The default for everyone is YES, because Yahoo knows that most people will not bother to change it.

This naturally puts more advertisements in front of more people.

On the other hand, Yahoo has obviously concluded that the advertising model does not work well for it's GeoCities product. If you have a web site you are only allowed a tiny amount of bandwidth before the site is shut off for the rest of the month. This means far fewer ads are shown. The purpose is to get the webmasters to pay for their web sites (which would be a poor decision on the part of most webmasters as their are many web hosts with far better service available at less cost).

So what is the answer for the consumer? Find services in which you are the direct customer. You will generally receive far better customer service, and you might be surprised to find out that the cost is not as bad as you might have thought.

About the Author
Richard Lowe Jr. is the webmaster of Internet Tips And Secrets at ( - Visit our website any time to read over 1,000 complete FREE articles about how to improve your
internet profits, enjoyment and knowledge.


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