Comment by mbesto
9 years ago
App.net and Medium have the same issue (why advertising is more lucrative than selling blogging software directly to content creators):
Let's say for every one content creator that are on average 100 eyeballs on the content they create (1:100). Almost universally, the 100 eyeballs can be translated to more economic value than the 1, and hence why the advertising model is so lucrative.
App.net from what I understand wasn't so much trying to sell to content creators as it was trying to create a Social-Graph-As-A-Service thing. I thought the original pitch was essentially two fold:
build your network with App.net and users can basically just opt-in automagically importing their data from other App.net networks thereby reducing the friction and hopefully making it easier to over come the ghost-town problem.
build your network with App.net and tool makers (including you) automatically get a well defined/robust/tested API to write apps against to interact with your network.
The advertising model is "lucrative" because that's where all the money is shunted, because that's what MarCom knows how to do. There's a century and a half of advertising agencies who need to capitalize on their training, and the newspaper/TV model is what we've gotten for it.