Since 2004, venture investors have put $5.1 billion into 828 Web start-up companies, and most of them are supported by ads, according to the National Venture Venture Capital Association. But now that advertisers have cut back their online spending, Web start-ups are searching for new ways to make money, like selling real, or virtual, goods or asking customers to buy subscriptions. And, according to the New York Times, venture capitalists who envision a sale of the company in the public markets are encouraging these efforts. Some firms say they consider only companies with one or two revenue streams in addition to advertising.
The latest and best example of success is OpenTable, a restaurant reservation site that makes money selling its software to restaurants and charging them $1 for each diner seated. Last week it became the first venture-backed company to go public in two years. The stock went up 43 percent the first day.
Other sites like Wetpaint.com, which allows anyone create a Web site free, now charges its big company customers, like HBO and Fox, a fee in exchange for providing extra services like site promotion and moderating readers forums. Also, smaller customers can pay to keep their site free of ads. And it is planning to add more paid services like storage for big files, personalized domains, and virtual goods. All these attemps to get new source streams come after rates for leftover ad space fell to 25 cents per thousand views from $1.
Pandora, an online radio site, now has 10 million listeners a month, and since ads are not enough, it has started a subscription service -for $3 a month listeners see and hear no ads and receive a desktop application and faster streaming.
Pandora's new model is called "freemium" -a mix of free and premium.
This model is becoming the most popular among Web start-ups.
Consultant firm eMarketer says that ad growth online grew 10.6 percent last year, and it will expand 4.5 percent this year. Advertisers are expected to spend less on display, classified and e-mail ads, and more on search and video ads.
On CDN Pricing, It Is Not Expected A Big Drop This Year
Pricing from the major CDN (or Content Delivery Networks) is getting pretty stable, without much decline, according to the analyst Dan Rayburn, especialist on this issue. Many of the contracts from the fourth quarter was for new business in the market; but those with renewing contracts saw on average about a 50 % decline in pricing from a year or more ago.
Another trend is that many of the major CDNs are giving volume discounts on lower tiers.
"Pricing is a factor but it is not the only factor for customers when signing contracts. For the quarter, the lowest pricing I saw in the market was still from newcomer BitGravity and the highest pricing was still from Akamai".
Akamai is still charging 20-25 % more than Limelight, Level 3 and CDNetworks.
"For 2009, I don't expect to see a big decline in pricing," Dan Rayburn says.
"CDNs have to multiply the volume of traffic on their network many times over before the next round of major pricing discount can take place. I think it will at least a year in the market before we see that happen."
Intel Launches Its Own Operating System, Called Moblin
Intel is launching a version of the open-source Linux operating system called Moblin, in a direct assault on Microsoft Windows. “This software resembles Windows or Apple’s Mac OS X to a negree, ” says The New York Times.
A polish second version of the software, which is in trials, will appear on a variety of networks this summer.
Intel says that Moblin is built with smartphones in mind. Intel’s main goal is to make its newest and low-power, low-cost Atom a success. For that, it needs Moblin because most of the cellphone software available today runs on chips whose architecture is different from Atom’s. A suplí of good software can make Atom a worthwhile choice for phone makers.
In the last few years, Intel’s investment in Linux has increased. Intel has hired some of the top Linux developers, as well as has bought open source software companies. Last year, it acquired OpenedHand, a company whose work has turned inte the base of the new Moblin user interface.
Intel thinks people are ready for something new on mobile devices, which are geared more to the Internet than to running desktop-style programs. This Moblin operating system reaches the Internet in about seven seconds.
Video Recording on G1 Google Android Phone (Cupcake update)
Google has added video recording capabilities to its Android operating system. This Android version 1.5, code-named Cupcake, also features video sharing via YouTube, email and MMS. The G1 phone (here the T-Mobile HTC phone) records 3gp videos encoded with the h.263 video codec.
There are two recording modes: High-quality offers a resolution of 352x288 and a 360 Kbps bit rate, while the low-quality setting (designated for MMS usage) comes with a resolution of 176x144 and a bit rate of 192 Kbps.
Some reviewer say that the camera on the G! Is not particularly good. Motion is pretty jerky and the colors are not great.
The killer app may be live streaming. Qik and similar companies can get implemented on the G1. Broadcasting live has a number of great potential uses.