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There's a lot of hate for ad plays here on HN, and that's fine. (My startup is a commission-based model as well.) But let's be honest - there are plenty of gr

There's a lot of hate for ad plays here on HN, and that's fine. (My startup is a commission-based model as well.) But let's be honest - there are plenty of great, useful apps supported by advertising and lead generation where the end-consumer pays not a penny: Google, Yelp, YouTube, Zillow, SideStep, YellowPages, TicketStumbler, and so forth. And plenty of media sites make money on ads: Ars Technica, Pitchfork Media, TechCrunch, Huffington Post, and so on. Let's not let the quest for ramen profitability distract us from looking long-term.

smakz 18y ago
I don't 'hate' companies that see advertising as their only revenue source, I just question both it's effectiveness in running a sustainable business and the hesitation that software developers working as founders have in charging real money for the quality services they are building. I don't count media companies, as I'm not sure of any ycombinator start ups focused on media (in the sense of being blogs, such as tech crunch or hpost, etc.), and those list of technology service-oriented companies you list, it's fairly questionable how great any of their business models really were/are. Everyone likes to point out Google and YouTube, but they forget google owns online advertising, period. And YouTube never really made any money. Don't get me wrong - it's great being an acquisition target and it's a great way to make some quick cash, but I think generally founders under-estimate the potential of their own company of being self sustaining and being very profitable with a paying customer base.
cstejerean 18y ago
Agreed, a website with low recurring expenses and high volume of quality traffic can probably survive just on advertising. The problem with advertising-only models IMHO is that ultimately survival of the company depends on other companies' advertising budgets instead of the value it's products provide to their end users. At the moment that situation does not seem ideal.
- jshen 18y ago
  "The problem with advertising-only models IMHO is that ultimately survival of the company depends on other companies' advertising budgets instead of the value it's products provide to their end users. At the moment that situation does not seem ideal." Um, depending on users paying you is equally problematic. I imagine this moment isn't good for that either.
  - smakz 18y ago
    Advertising budgets are down just as much as consumer confidence - they are tightly related. But even in hard times people's needs don't change - save people time, money, or make them healthier, #2 might be more attractive in recessions, but people will always pay for any of those services.
    - jshen 18y ago
      and they will find out about those services via marketing.
access_denied 18y ago
Google does not online profit from advertising revenue but also from data mining, when you use their services.

smakz 18y ago

I don't 'hate' companies that see advertising as their only revenue source, I just question both it's effectiveness in running a sustainable business and the hesitation that software developers working as founders have in charging real money for the quality services they are building. I don't count media companies, as I'm not sure of any ycombinator start ups focused on media (in the sense of being blogs, such as tech crunch or hpost, etc.), and those list of technology service-oriented companies you list, it's fairly questionable how great any of their business models really were/are. Everyone likes to point out Google and YouTube, but they forget google owns online advertising, period. And YouTube never really made any money. Don't get me wrong - it's great being an acquisition target and it's a great way to make some quick cash, but I think generally founders under-estimate the potential of their own company of being self sustaining and being very profitable with a paying customer base.

cstejerean 18y ago

Agreed, a website with low recurring expenses and high volume of quality traffic can probably survive just on advertising. The problem with advertising-only models IMHO is that ultimately survival of the company depends on other companies' advertising budgets instead of the value it's products provide to their end users. At the moment that situation does not seem ideal.

jshen 18y ago
"The problem with advertising-only models IMHO is that ultimately survival of the company depends on other companies' advertising budgets instead of the value it's products provide to their end users. At the moment that situation does not seem ideal." Um, depending on users paying you is equally problematic. I imagine this moment isn't good for that either.
- smakz 18y ago
  Advertising budgets are down just as much as consumer confidence - they are tightly related. But even in hard times people's needs don't change - save people time, money, or make them healthier, #2 might be more attractive in recessions, but people will always pay for any of those services.
  - jshen 18y ago
    and they will find out about those services via marketing.

access_denied 18y ago

Google does not online profit from advertising revenue but also from data mining, when you use their services.