At least two Del.icio.us competitors, Simpy and RawSugar (profiles) have begun paying users to use and promote their services. While the companies have different payment models, both pay based on traffic generated at a particular users page containing the user’s bookmarks.
Simpy
Otis Gospodnetic’s Simpy is allowing users to enter their Google Adsense account number and ads will be shown on their bookmark page. See Otis’ Simpy page for an example.
Simpy is paying 100% of the proceeds from Google to the user for any ads on the page (in fact Google pays the user directly).
Raw Sugar
Raw Sugar is taking a more direct approach – they are paying the top twenty “directories” (user bookmark pages) between $25 and $500 per month. Directories are ranked on raw traffic, and the first payouts were made earlier this month.
RawSugar also plans to pay users a percentage of advertising revenue in a similar way as Simpy.
Is this a gimick to generate attention or is it a viable long term strategy to generate user adoption? Pete Cashmore thinks these promotions should make Yahoo (now owner of del.icio.us) take notice (see his further thoughts in the comments below). Maybe he’s right. And the markets for these products are still in the very early adopter stage.
But it is going to be hard for anyone to overcome the del.icio.us network effect (not to mention Yahoo’s marketing muscle) with relatively small direct economic incentives. I am, however, looking forward to seeing how these promotions drive new user registrations and site traffic. At the end of the day, these companies have nothing to lose with experiments like these.
Just to clarify: I didn’t say that Yahoo should “take notice” in the sense that they should introduce revenue sharing in order to keep their users. And I certainly don’t think anyone is going to switch services just because of these token payments. Here’s the paragraph:
“It’ll be interesting to see if the ad revenue from social bookmarking sites will ever be more than a token gesture to users. Admittedly, Rawsugar is only paying a bounty to the top users, while Simpy will let everyone profit, but it’s not clear whether the pageviews generated by the average user will ever amount to real cash. Case in point: Epinions.com, which started out paying users a few dollars for every product review they submitted – as the site grew, the payments dropped to less than a cent. Still, it makes me wonder if Yahoo will spot this obvious opportunity to monetize del.icio.us.”
My point here is that it’s going to be hard to monetize del.icio.us – the only business model is advertising, and users won’t like that. But if Yahoo lets users put their own YPN ID on their del.cio.us page (like they’re doing with Yahoo Answers), they can boost the popularity of YPN and make money from del.icio.us. What’s more, their users won’t be so quick to object if Yahoo is paying them.
@PeteCashmore: I agree completely. 25$ to 500$ is peanuts, and probably the top20 are users that put a lot of time and effort into their bookmarkingpage, so they’ll want to increase thhis payment exponentially or indeed let them integrate yahoo/google ads.
Not sure that paying users 100% of your revenues is a viable business model or strategy. It might get them a little bit of attention.
At http://www.blinklist.com we are taking a different approach by rapidly innovating on our product to make it better and better. So far our community is growing very rapidly and embracing our service and they are recognizing the big improvements we keep rolling out week after week.
Mike,
I agree that 100% doesn’t make total sense as a business model. I said as much in my review:
“It’s definitely a sign of goodwill towards users, but I’m not sure that paying 100% profit to the user makes absolute business sense (in Yahoo’s case it made sense because they owned the ad network itself).” [I'm referring to Yahoo Answers, which will let you put your YPN ID on their pages]
I think Yahoo is in a much better position to do this successfully than Simpy, Rawsugar et al. More here:
http://mashable...ou-to-bookmark/
To be fair, Simpy is only paying 100% of revenue from ads on users’ pages, not on other parts of the site.
Like some of the other guys commenting here, and no matter what your vertical within the social network model might be, we at http://www.prefound.com agree that offering the best site you can produce, and innovating in directions that your users direct you, is by far the preferred way to build usership. Del.ici.us proved that giving users a great technology is the foundation for success, without any marketing gimmicks.
While they are clearly in different businesses, with SugarCRM being such a prominent name in software I think the naming of RawSugar is somewhat questionable.
Hopefully one of the things that Web2.0 will usher in is a way for people to legitimately Earn Money on the Internet!
What a concept!!
There is a whole “New” economy just waiting to be created. & a lot of eager, talented workers tired of workin fer “the man”; the corporation who in the words of the great Johnny Paycheck would luvv to say those immortal words “Take this Job & Shove It!”
)
Frankly I’m surprized nobody’s created this Nirvana yet!
Hey, Pete, Maybe I got your viewpoint a little wrong. I am going to tweak things a bit above based on your comment.
Actually, Pete I’m not sure how to rewrite the text mentioning you so I am just pointing to your comments in this post. I don’t want to put (any additional) words in your mouth.
By the way, we have just started using this plugin that highlights my own comments. Is this useful or does it seem a little stupid?
Hola,
I don’t know about RawSugar, but I can tell you more about Simpy’s give-away, and would be happy to answer anyone’s questions. This really is a way to give something back to people. Yes, nobody will get rich, but I don’t see why people wouldn’t see any income from this, even if it is small. You have to remember that people are not bookmarking and tagging in order to make money, so this is really a bonus, the “hey, why not, it’s not like I have to do any extra work” money.
Another important bit about Simpy is that this is not targeted at any particulr user group (see here).
There is more. While one can put del.icio.us, RawSugar, etc. in the same bucket function-wise, keep in mind that:
1) del.icio.us/Y! == big public company
2) RawSugar == relatively big company trying to figure out a business and survive
3) Simpy == 1 guy’s side project.
Finally, one important aspect of this experiment with Simpy is the differentiation between logged in and logged out Simpy users. Only logged out users see ads. As soon as you log in, the ads are gone. The reason for this is that I/nobody is a big fan of ads, and I didn’t want to consume precious UI realestate with them. Has anyone else used this approach? If so, I’m not aware of it, but when I thought of it, I was happy about the idea all day!
If anyone has any questions about this, I’d be happy to answer. I don’t want people to misunderstand things, and that seems to be the tendency as soon as there is money involved.
Michael – your comments highlighted – I like it!
Michael..I´m with Otis on the highlighting. I think this is a nice addition.
Hey Mike,
Well, the reason I tried to clarify is that the phrase “take notice” implies that Simpy and RawSugar are somehow a threat to del.icio.us (as if people will be convinced to switch services to earn a few cents). I don’t think that’s the case – as you point out, the network effect has taken hold already. I think first mover advantage is a genuine phenomenon when it comes to web services – subsequent bookmarking sites will struggle even if they offer a better value proposition (better service, revenue share etc).
My point was that revenue sharing would be a good business model for del.icio.us. This is nothing to do with retaining users – it’s actually a way for Yahoo to make money from the service without offending anyone. Users could put their own YPN ID on their member pages, making money for both Yahoo and its users. (Incidentally, do you remember the unease when del.icio.us was sold, and members started to calculate how much their bookmarks were worth to Yahoo?).
So I guess a better way to explain my viewpoint would be something like “Pete Cashmore thinks that revenue sharing could be a powerful business model for del.icio.us – users could put their YPN IDs on their pages, benefiting both Yahoo and the del.icio.us community.”
Oh yeah, and I like the highlighting too.
And meanwhile, I don’t make any money with my bookmarks on http://blogmarks.net but I still like it best…
imho, your highlighted comments is a good idea…
Michael | I really do like the highlighting of your comments
Pete | While I do agree that there are network effects in the social bookmarking world, I would say that they are 1) not as strong as in some other segments like online auctions for example and 2) the switching costs are also quite low given that users can simply export and import bookmarks.
Lastly, in a network effects driven business it all does not matter until one has reached the tipping point. I don’t think del.icio.us is there yet. They have a great chance of getting there first, but we at http://www.blinklist.com are quite confident that it is still very early before anyone is close to hitting the tipping point.
highlights = good
Ok, cool. I’ll stick with the highlights for now.
The thing I find shocking is that Simpy decided to give 100% to their user base.
This just doesn’t make a lot of sense it’s a reasonable expectation for Simpy to at least take a cut to cover hosting costs.
Kevin
Kevin – #25 – Since you are inserting your own adsense code, Simpy actually never even touches the money. I suspect this is more a response to the work that would be required in tracking and paying out users “share” if they were to try to take a percentage.
To paraphrase Isaac Asimov, “Paying users is the last refuge of the incompetent.” Simply tacking on paying users strikes me as a painful reminder of the excesses of the tail end of the last boom.
If a user experience isn’t compelling without the cash, the small amounts a typical consumer service can afford to pay simply aren’t that effective.
Kevin: it’s not all about money. That is why I pointed out that Simpy == 1 person’s side project. For me, this is more about experimenting and learning about human behaviour than making money. In the long run, I think that’s more valuable in life. I already learned that people freak out and become super-suspicious when money enters the picture.
Michael: that is partly it. I prefer it this way – I don’t need to do any work, I don’t pay anything to anyone, people earn whatever they earn, and I don’t even need to know how much they earn.
I think the important thing to see here, at least in Simpy’s case, is that Simpy is not paying anyone! RawSugar is. Simpy is not – Google is. I simply make it possible.
A couple of clarifications:
First, the RawSugar Rewards program is, as I mentioned on Pete’s post, a way to share with our members before we introduce advertising later this year.
Second, while we’re certainly bigger than Otis’s one man side project we’re hardly a big company at leass than a dozen nor are we searching for a business model. For more details on the latter watch for news from Demo in a week.
Re the comment highlighting, I think it’s a nice touch, but I think it would help if you had a note right after “X Comments” in the beginning of the comments section explaining what a highlighted comment stands for. This will help those who are new to the site and don’t know who its author is understand why some comments are highlighted.
If you do not have the first mover advantage then you got to pony up the money to attract attention. Sad, but a fact of life.
Of course, I am just a tiny bit biased, since I am in a similar “industry” myself, since DoBump offers paid forum posters for new or struggling forums.
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