Population Statistic: Read. React. Repeat.
Tuesday, December 16, 2021

While popular social networking sites like Facebook and MySpace notoriously lose money at a steady clip, old-style targeted subscription email publications rake in the cash.

In August, Comcast paid roughly $125 million for DailyCandy.com, a Thrillist-for-women with 2.5 million subscribers in 10 cities who opt-in to their product and entertainment recommendations. DailyCandy is expected to post $10 million in profits this year on $25 million in revenues, according to a source close to the business.

Just a year after its launch, Ideal Bite, which sends daily environmental tips, sold to Disney in June for about $20 million.

And Thrillist? With just $1 million in funding so far, company profits recently hit seven figures.

There’s a business-side irony here: The Web 2.0 ventures, despite being the cutting-edge applications of online media, still function under the turn-of-the-century money-bleeding model of Web ventures. The niche e-newsletters, on the other hand, are unabashedly low-tech by Internet standards, and yet they work better as revenue-generating vehicles.

Why? Partly it’s knowing the audience. People who sign up for Thrillist and the like prefer to get content pushed to them via email. It may seem antiquated in the age of texting, IM, and RSS, but the original online communication channel is still fairly direct for certain kinds of messaging — particularly advertising and marketing pitches.

The other half of the equation: It’s also a familiar format for the advertisers to buy into. No convoluted Web traffic stats that try to convince you that the audience is engaged just because the browser session lasts more than five minutes (which probably only means that the person got a phone call and stopped watching the computer screen); it’s simple circulation numbers, with some clickthrough percentages thrown in. Companies feel comfortable enough with that correlation to sink money into that, provided the demographics match up.

Further, this scenario shows that next-wave media doesn’t really kill off the previous media. Just as television didn’t completely wipe out radio, Web 2.0 won’t eliminate Web 1.0. There’s room for both to coexist in an online content universe.

by Costa Tsiokos, Tue 12/16/2008 05:06pm
Category: Business, Internet, Social Media Online
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2 Feedbacks »
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