where does revenue come from?

The question was asked ....

< Where does the actual revenue come from? - a low margin ad network business? >

Looksmart have explained very little, in fact practically ZERO in what they are up to, or, (as a matter of fact) how it is intended to all work. The following is purely my thoughts on, where (private) Google Group members think it is all heading.

So, if 10 separate newspaper groups had 10 publications and each had a web site that attracted just 1000 regular (daily) ‘visitors’, (collectively), we would then have 100,000 “users”, daily.



If all of those abovementioned publications then had 10,000 (no duplicates) archived articles each, (collectively) we would now have a total of ONE million articles. So, currently, for each publication’s (individual) users to get the opportunity to access all of those 1M articles, they would then, (all) need to laboriously “bookmark” 100 different websites, or, hope to “pick up” a (particularly) popular & informative article (written by a journalist or, reporter of any of those 100 publications), through a ‘natural search’ process on a BIG portal, such as Google, Yahoo, MSN or, AOL.

Looksmart’s David Hills, in taking on the CEO job, inherited (along with an obvious “mess”) a couple of Looksmart properties called FindArticles.com and Furl.net. The former (an articles repository, with content basically provided through newspaper & magazine archive, management companies) had increased it’s number of articles from 2M, up to 5M in those early days. Whilst it was FREE to access most of these articles, the ‘deal’ (it appears) was to then, also list headlines, topics and/or, even story ‘teasers’ (with these special articles/publications being under “lock & key”) with FindArticles then pointing a user (via a ‘live’ URL link) to the Co that has the story archived and thereby introducing it’s own (treasure trove) of more “pay for view” type, “premium” content.

Eg; http://www.findarticles.com/p/articles/tn_bus

(‘click on’ a few of them, at random to find the Co who are controlling the archives.- Goliath - Highbeam, etc)

Looksmart gets some of it’s own revenues from those Google (adsense) ADS, down the RHS of each results page. (plus banners, etc) The link I have provided really is a pretty ‘extreme’ example. (Be sure to ‘click on’ a few FREE category links to also witness an additional access facility, (More from publication ) that points a user onto more similar type (and again FREE) articles, from that particular publisher.

David Hills (knowing that Vertical Sites had been tried in other fields) came “on board” with a solid background that included time at the very successful About.com (was recently bought by The NY Times for $410m) set off on the road to establishing the 181 Vertical Search Sites Looksmart now have, with others soon to be launched.

What he has done is, (in the1st instance) increased (doubled) the number of articles into FindArticles, (and although it is showing 10M currently, in a CC a while back, figures were mentioned to be over 12M) and privately, members of a Google Group have found (at times) articles indexed (on Google) to be showing in “multiples” of this, “over” 12M figure. And this is the (ever growing) base of content David Hills needed to go ahead and, (in his own words), “slice and dice” all these articles into specific (type), “topic only” Vertical search sites.

So, lets now get back to those 10 separate newspaper groups that (we know) have the 10 publications and that each have a web site that attracts just 1000 regular (daily) ‘visitors’, and (collectively), we know that they have 100,000 “users”, daily.

David Hills approaches them with his “souped-up version” of the FindArticles.com concept, tells these publishers group (“head honcho’s) of a means, (a way), whereby (all of them) could now potentially increase their existing or, their current “user base” (daily visitors to each website), by ONE HUNDRED times!!

He explains to them, that by “sharing” their content with each other, not only do they automatically qualify for a possible “influx” of new visitors, they can then go back to their own advertisers and tell them of the good news!! More “eyeballs”, creates more advertisers, and helps retain existing advertisers, looking to find a place elsewhere on the Internet, to maximise annual “budget”. Advertisers are now said to be moving from “traditional” newspapers, TV or, magazines, rapidly!!

(The estimate ADS spend on the NET for FY 2006, is $10B !! Ten Billion Dollars.)

The Looksmart plan was heralded in it’s “Calling All Publisher/s” announcement. The Verticals can now provide (again David Hill’s words) people with a passion for their particular interest to search (as normal) on the BIG Portals, find the Vertical they feel is most suited to their needs (& within their initial search results, too) and go to it and find listed, articles provided by those 10 separate newspaper groups and from those 10 publications they each own. In choosing an article, (in Looksmart’s Vertical) they then head off to one of those partner Newspaper, Magazine or, TV web sites, being, the “original” provider of that chosen content!!

But the question was: < Where does the actual revenue come from? >

Well, Looksmart (now) have a situation whereby those 100,000 “users” from partner sites “visit” a Vertical (daily) and to a results page full of contextualised ADS on the way to making their choice, of the many articles they (Looksmart) now display. And, those ADS target the exact demographics of those who come, their sex, along with their age groups, interest, etc

And how many users could there “potentially” be?

Go back on my posts and check who “owns” Topix.net, a “partner” of Looksmart. Now see if they are listed in the Top 200 here. (And how many times!) - I’ll make it easier G, T, KR & Mc

Wait until they start to promote the concept. And they will.

http://www.accessabc.com/reader/top150.htm

And then there’s Furl.net …. But that’s for another day.

:)

LC