

Investors to Web Start-Ups: Where's the Advertising? - jkopelman
http://online.wsj.com/article/SB118765700693403584.html?mod=yahoo_hs&ru=yahoo

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alex_c
I'm sure part of the rationale is - given how cheap
bandwidth/hardware/software is getting, if you're charging for your service on
the web, chances are someone will come along and give it away for free. I
guess when that happens investors aren't really willing to bet that the pay
service will continue to grow once there's a free alternative.

Which isn't to say that's always true...

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nickb
>Which isn't to say that's always true...

Exactly... just take eBay as an example. No amount of no-fee auctions has been
able to dethrone them. If you think about it, you will notice that as soon as
you're mediating the exchange and money changes hands, people don't mind
giving you cut at all. They don't even consider the fee when
listing/purchasing (well, eBay charges listers so purchasers don't mind). As
long as you can attract enough purchasers (i.e. eyeballs), sellers will come.
That's why eBay is not squeamish about jacking up the fees...

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brlewis
This is counterintuitive to me. I thought VCs did _not_ want uniformity of
business models among the startups they fund.

