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> It can't be modeled well as a for-profit company I'm not an MBA, but why the hell not? They entice people to become regular users with all the free stuff, bu
by nollidge 14y ago
> It can't be modeled well as a for-profit company
I'm not an MBA, but why the hell not? They entice people to become regular users with all the free stuff, building a network, allowing them to make an enormous profit off of the few products they do sell.
If they started charging for other things besides job ads (and the other 1 or 2 things they charge for), they could very well start losing money because of people refusing to pay and going elsewhere.
- jessriedel 14y agoHere, "Money left on the table" doesn't mean "short-term money that would have long term negative consequences for the business". I means free money, that is money after you take into account the effects of various price changes. You may disagree and claim that CL's strategy of charging for nothing besides a few NY/LA business listings is for-profit optimal--and therefore that there's really no free money--but you'd be in a minority.
- nollidge 14y agoAh, I forgot that the paid listings were only for certain locations, not just certain categories.
- dredmorbius 14y agoI do in fact argue that CL's strategy is profit-optimizing as a market-making and competition-avoiding strategy: http://news.ycombinator.com/item?id=4324889 http://news.ycombinator.com/item?id=4324889