This revenue stream is very relevant to some types of web2.0 companies – http://www.crowdstorm.com and http://www.trustedplaces.com spring to mind in the UK – and we are exploring whether it can be made relevant for social networks.

This revenue stream is very relevant to some types of web2.0 companies – http://www.crowdstorm.com and http://www.trustedplaces.com spring to mind in the UK – and we are exploring whether it can be made relevant for social networks.

The problem with subscription revenues (in my experience) is finding the balance between what is free and what is premium. Not always clearly split.

Another revenue model that I could see growing is transaction costs/introduction fees. Particularly for companies based around a network or marketplace then a transaction fee is viable. The introduction fees work the same as the physical world. When a company introduces to parties and a piece of business is concluded then a “introduction fee” is paid. A variant on the pay-per-action model I guess.

The problem with subscription revenues (in my experience) is finding the balance between what is free and what is premium. Not always clearly split.

Another revenue model that I could see growing is transaction costs/introduction fees. Particularly for companies based around a network or marketplace then a transaction fee is viable. The introduction fees work the same as the physical world. When a company introduces to parties and a piece of business is concluded then a “introduction fee” is paid. A variant on the pay-per-action model I guess.

I think you’re right – the because rather than with dichotomy is not as stark as I had thought. In addition to your well made support point, at MySQL there are also professional license components to the revenue model.

The fourth element of monetisation (after ads, support and professional license) is subscription for premium services. Friends Reunited did that very successfully and we are about to close a web2.0 deal in a company that has significant subscription revenues.

I think you’re right – the because rather than with dichotomy is not as stark as I had thought. In addition to your well made support point, at MySQL there are also professional license components to the revenue model.

The fourth element of monetisation (after ads, support and professional license) is subscription for premium services. Friends Reunited did that very successfully and we are about to close a web2.0 deal in a company that has significant subscription revenues.

Should VCs invest in more in-direct money making business models? I would say yes. For the simple reason of diversity. Direct models are not always suitable nor the most effect method of making money. The biggest problem I see in in-direct models is the lack on convincing methods. There is primarily two; support services and advertising. For more web 2.0 business to get off the ground there has to be more.

With a lot of the debate surrounding monetisation (that dreaded word!) I have yet to see anyone ask how else can we get people to part for money for a product/service in-directly and come up with anything other variations on support and advertising.

Should VCs invest in more in-direct money making business models? I would say yes. For the simple reason of diversity. Direct models are not always suitable nor the most effect method of making money. The biggest problem I see in in-direct models is the lack on convincing methods. There is primarily two; support services and advertising. For more web 2.0 business to get off the ground there has to be more.

With a lot of the debate surrounding monetisation (that dreaded word!) I have yet to see anyone ask how else can we get people to part for money for a product/service in-directly and come up with anything other variations on support and advertising.