Sangat Pedas

A Paradoxal Business Model Called Online Advertising

October 12, 2011 by Remco | 10 Comments

Yesterday I gave some excellent tips on how (not) to pitch your startup, good stuff! One of my points was it’s better to say that you haven’t quite figured out your business model instead of saying advertising is your business model. Internet addict Okto, better known as @labanux, asked me why. Why is online advertising as a sole business model so bad? Google, Facebook, Twitter, Kaskus, Detik and many many others run on online advertising so is it really that bad a business model?

Ever been to a restaurant where one waiter welcomes you and another waiter tells you the neighbors have great Japanese food? Ever been to a boutique where, before you bought anything, the sales person tells you two blocks down you can get 20% discount on an iPad? Well, chances are slim that this happened to you in a brick and mortar store but it happens online. Entrepreneurs on one hand do their utmost best to get more people to visit their site or use their app to then show them the way out with a banner or ad. Though this is a black and white interpretation of something that has more shades, it’s basically the paradox of using online advertising as your business model.

Continue Reading →