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Siren Call of the Destination Site
Jeff Nolan writes that he is “Done with Digg” in his Venture Chronicles:
Digg just isn’t doing anything for me to make my day easier. I’m finding this with a number of “Web 2.0″ sites, after the initial enthusiasm wears dull I’m left with a big “so what” feeling that I can’t escape.
I have to agree. There is a high level of potential getting lost with these services, particularly as they race to be destinations in order to reap the advertising revenues that are so popular, rather than acting as services to drive revenues. Nolan sees this:
Sites like Digg were at one time promised (not by Kevin but rather by commentators on “the street”) to be rich information stores that could be mined and presented in many different ways through the efforts of a cottage industry that would spring up in response to the opportunity.
I also saw a similar argument in Matt Marshall’s analysis of BitTorrent’s recent round of funding:
Trouble is, BitTorrent has never gained mass appeal among regular consumers. It is best as a back-end distribution protocol. Now major retailers have entered the market, from Apple, which offers its own movie downloading service, to AT&T, Amazon.com, Microsoft and WalMart (see news yesterday), offering similar services — all making it easy for regular folk to watch movies from their TV screens. You’d think BitTorrent would be more focused on becoming the distribution partner for some of these players, rather than try to become the consumer destination.
The real trouble is that nobody has figured out a business model for being a back-end service provider, without the advertising revenues from a front-end site.
This is where being innovative with the business model is going to be a bigger win than just inventing new technologies. Only a small fraction of software businesses are sustainable as destination sites. Those who figure out who to succeed as something other than that in our brave new “web 2.0″ world will have a great run.